If Lisa spends her income on veggie burgers and pints of soy milk ...

[misspop]

If Lisa spends her income on veggie burgers and pints of soy milk and the price of veggie burgers is three times the price of a pint of soy milk, then when Lisa maximizes her utility she will buy
 
  A) three times as many pints of soy milk as veggie burgers.
  B) both goods until the marginal utility of veggie burgers is three times the marginal utility of soy milk.
  C) three times as many veggie burgers as pints of soy milk.
  D) both goods until the marginal utility of a pint of soy milk is three times the marginal utility of veggie burgers.

Question 2

Are the costs of utilities always fixed, always variable, or can they be both? Briefly explain.
 
  What will be an ideal response?

[tofugiraffe]

Answer to Question 1

B

Answer to Question 2

For many firms, the cost of utilities can be a mixture of fixed and variable costs. For example, a store may keep its lights on and its outdoor signs lighted day and night. The cost of the electricity to keep these lights on would, therefore, be a fixed cost because the cost does not vary with the quantity of the product sold. On the other hand, if, for example, the store is a laundromat, then the more people who use the washers and dryers, the more electricity it uses. So, that part of its electric bill is a variable cost.