6 Rebecca consumes both iced tea and coffee. Iced tea is priced at $1.50 per bottle and coffee at $2.00per 16-ounce cup. Which of the following marginal utility pairs is consistent with Rebecca'sconsumer equilibrium at these prices?a. MU of iced tea = 1; MU of coffee - 1b. MU of iced tea -1; MU of coffee-2c. MU of iced tea -2; MU of coffee = 3d. MU of iced tea = 3; MU of coffee = 4e. MU of iced tea = 4; MU of coffee = 5

The objective of the question is to find the pair of marginal utilities for iced tea and coffee that…

Answered: 6 Rebecca consumes both iced tea and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Rohan’s current marginal utility from consuming peanuts is 100 utils per ounce and his marginal utility from consuming cashews is 200 utils per ounce. If peanuts cost $0.10 per ounce and cashews cost $0.50 per ounce, is Rohan maximizing his total utility from the kinds of nuts? Enter your responses as whole numbers. At the current level of peanut consumption, Rohan receives: utils per dollar.At the current level of cashew consumption, Rohan receives: utils per dollar.Therefore, Rohan maximizing his total utility because MUp/Pp is MUc/Pc.
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