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Author Question: Basil is maximizing his utility from consuming tea and crumpets. If the marginal utility of the last ... (Read 109 times)

Themember4

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on: Jul 1, 2018
Basil is maximizing his utility from consuming tea and crumpets. If the marginal utility of the last crumpet was 32 units of utility and the prices of tea and crumpets are 4 and 8, respectively, what was the marginal utility of the last cup of tea Basil consumed?
 a. 2 units of utility
  b. 12 units of utility
  c. 6
  d. 128 units of utility
  e. 16 units of utility

Question 2

Basil is maximizing his utility from consuming tea and crumpets. If the marginal utility of his last cup of tea was 24 units of utility and that of his last crumpet was 6 units of utility, which of the following is true?
 a. The price of tea is six times the price of crumpets.
  b. The price of crumpets is four times the price of tea.
  c. The prices of tea and crumpets are equal.
  d. The price of tea is four times the price of crumpets.
  e. The MU of the next cup of tea is less than the MU of the next crumpet.


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lindahyatt42

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Reply #1 on: Jul 1, 2018
Answer to Question 1

E

Answer to Question 2

D


Themember4

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Reply 2 on: Jul 1, 2018
Wow, this really help

covalentbond

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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