Asked by
keshav Mishra
on Dec 05, 2024
Verified
Nancy is consuming her optimal consumption bundle of burritos and margaritas.The marginal utility of her last burrito was 75 utils,and each burrito costs $3.Her marginal utility of her last margarita was 100 utils.What is the price of a margarita?
A) $1
B) $2
C) $3
D) $4
Optimal Consumption
The mix of goods and services purchased that maximizes the utility or satisfaction of a consumer given their budget constraint.
Marginal Utility
The additional pleasure a consumer experiences from acquiring another unit of a product or service.
- Calculate the optimal consumption bundle using the marginal utility per dollar spent.
Verified Answer
RK
Learning Objectives
- Calculate the optimal consumption bundle using the marginal utility per dollar spent.