Author Question: Bill currently uses his entire budget to purchase 5 cans of Pepsi and 3 hamburgers per week. The ... (Read 48 times)

maegan_martin · **on:** Jul 1, 2018

Bill currently uses his entire budget to purchase 5 cans of Pepsi and 3 hamburgers per week. The price of Pepsi is 1 per can, the price of a hamburger is 2, Bill's marginal utility from Pepsi is 4, and his marginal utility from hamburgers is 6.

Bill could increase his utility by: A) increasing Pepsi consumption and reducing hamburger consumption.
B) increasing hamburger consumption and reducing Pepsi consumption.
C) maintaining his current consumption choices.
D) We do not have enough information to answer this question.

Question 2

When a monopolist engages in perfect price discrimination,

A) the marginal revenue curve lies below the demand curve.
B) the demand curve and the marginal revenue curve are identical.
C) marginal cost becomes zero.
D) the marginal revenue curve becomes horizontal.