3. Balancing utility and priceSuppose Teresa has to choose between purchasing plane tickets and milk.Which of the following is the utility-maximizing rule that Teresa should follow while choosing the optimal quantities of these two goods? (Note: In theanswer options that follow, MU stands for "marginal utility.")O (MU of Milk) x (Price of Milk) = (MU of Plane Tickets) x (Price of Plane Tickets)O MU of Milk = MU of Plane TicketsMU of MilkMU of Plane Tickets%3DPrice of MilkPrice of Plane TicketsMU of MilkMU of Plane Tickets=Price of Plane TicketsPrice of MilkSince milk costs little and plane tickets are expensive, it must follow that when people choose their optimal quantities of milk and plane tickets topurchase, the marginal utility they receive from the last plane ticket they buy isv than the marginal utility they receive from the lastgallon of milk they buy.

3. Balancing utility and price Suppose Teresa has to choose between purchasing plane tickets and milk. Which of the following is the utility-maximizing rule that Teresa should follow while choosing the optimal quantities of these two goods? (Note: In the answer options that follow, MU stands for "marginal utility.") O (MU of Milk) × (Price of Milk) = (MU of Plane Tickets) × (Price of Plane Tickets) O MU of Milk = MU of Plane Tickets MU of Milk MU of Plane Tickets Price of Milk Price of Plane Tickets MU of Plane Tickets Price of Milk MU of Milk Price of Plane Tickets Since milk costs little and plane tickets are expensive, it must follow that when people choose their optimal quantities of milk and plane tickets to purchase, the marginal utility they receive from the last plane ticket they buy is v than the marginal utility they receive from the last gallon of milk they buy.

3. Balancing utility and price Suppose Teresa has to choose between purchasing plane tickets and milk. Which of the following is the utility-maximizing rule that Teresa should follow while choosing the optimal quantities of these two goods? (Note: In the answer options that follow, MU stands for "marginal utility.") O (MU of Milk) × (Price of Milk) = (MU of Plane Tickets) × (Price of Plane Tickets) O MU of Milk = MU of Plane Tickets MU of Milk MU of Plane Tickets Price of Milk Price of Plane Tickets MU of Plane Tickets Price of Milk MU of Milk Price of Plane Tickets Since milk costs little and plane tickets are expensive, it must follow that when people choose their optimal quantities of milk and plane tickets to purchase, the marginal utility they receive from the last plane ticket they buy is v than the marginal utility they receive from the last gallon of milk they buy.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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