Mr. Rational has 27 that he plans to spend purchasing 5 units of good X (priced at 3 per unit) and 6 units of good Y (priced at 2 per unit). The marginal utility of the fifth unit of X is 30, and the marginal utility of the sixth unit of Y is 30 . If Mr. Rational is a utility maximizer, he should:
a. not buy anything.
b. buy more of X and less of Y.
c. buy less of X and more of Y.
d. buy X and Y in the quantities indicated.
e. buy less of X and even lesser than that of Y.
Question 2
You operate a factory that produces beach towels. Your current level of output equals 2,000 towels per week. Your weekly variable cost equals 8,000 . If your total cost each week equals 9,000 . it follows that:
a. the average variable cost of production equals 2 per towel.
b. the average variable cost of production equals 4 per towel.
c. the average total cost of production equals 8 per towel.
d. none of the above
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