Multiple Choice
Use the following to answer questions:
Figure: Coffee and Comic Books
-(Figure: Coffee and Comic Books) Refer to the figure. A consumer has $2 to spend on comic books (priced at $1 per comic book) and coffee (priced at $1 per cup) . To maximize utility, should this consumer buy two cups of coffee?
A) Yes, buying two cups of coffee maximizes the consumer's total utility.
B) Yes, because the marginal utility of the second comic book is less than the marginal utility of the second cup of coffee.
C) No, the consumer should put back one cup of coffee (losing 16 utils) and replace it with a comic book (gaining 18 utils) .
D) No, the consumer should buy two comic books to maximize utility.
Correct Answer:

Verified
Correct Answer:
Verified
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