Are You are you maximizing utility? A. not maximizing utility because the marginal utility of movies is not equal to the marginal utility of CDs. B. maximizing utility because you are spending all of your entertainment budget. O C. not maximizing utility because the price of movies is not equal to the price of CDs. D. maximizing utility because you are consuming an equal number of movies and CDs. E. not maximizing utility because the marginal utility per dollar spent on movies is not equal to the marginal utility per dollar spent on CDs. What could you do to increase utility? You could increase utility by consuming more and fewer
Are You are you maximizing utility? A. not maximizing utility because the marginal utility of movies is not equal to the marginal utility of CDs. B. maximizing utility because you are spending all of your entertainment budget. O C. not maximizing utility because the price of movies is not equal to the price of CDs. D. maximizing utility because you are consuming an equal number of movies and CDs. E. not maximizing utility because the marginal utility per dollar spent on movies is not equal to the marginal utility per dollar spent on CDs. What could you do to increase utility? You could increase utility by consuming more and fewer
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Suppose you have a monthly entertainment budget that you use to rent movies and purchase CDs. You currently use
your income to rent 5 movies per month at a cost of $5.00 per movie and to purchase 5 CDs per month at a cost
of $10.00 per CD. Your marginal utility from the fifth movie is 50 and your marginal utility from the fifth CD is 90.
Are you maximizing utility?
You are
O A. not maximizing utility because the marginal utility of movies is not equal to the marginal utility of CDs.
B. maximizing utility because you are spending all of your entertainment budget.
C. not maximizing utility because the price of movies is not equal to the price of CDs.
D. maximizing utility because you are consuming an equal number of movies and CDs.
O E. not maximizing utility because the marginal utility per dollar spent on movies is not equal to the marginal utility
per dollar spent on CDs.
What could you do to increase utility?
You could increase utility by consuming more
and fewer
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