Question 23 Diego spends all of his income on milkshakes and French fries. At his current consumption level the marginal utility of one milkshake is double of the marginal utility of one order of French fries. According to the optimal consumption rule: O Diego will maximize his utility by specializing in consumption and buying either milkshakes or fries but not both. O Diego is maximizing his utility only if one milkshake and one order of French fries have the same price. O Diego is maximizing his utility only if the price of one milkshake is twice of the price of one order of French fries. O Diego is maximizing his utility.
Question 23 Diego spends all of his income on milkshakes and French fries. At his current consumption level the marginal utility of one milkshake is double of the marginal utility of one order of French fries. According to the optimal consumption rule: O Diego will maximize his utility by specializing in consumption and buying either milkshakes or fries but not both. O Diego is maximizing his utility only if one milkshake and one order of French fries have the same price. O Diego is maximizing his utility only if the price of one milkshake is twice of the price of one order of French fries. O Diego is maximizing his utility.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
23
Transcribed Image Text:Question 23
Diego spends all of his income on milkshakes and French fries. At his current consumption level
the marginal utility of one milkshake is double of the marginal utility of one order of French
fries. According to the optimal consumption rule:
O Diego will maximize his utility by specializing in consumption and buying either milkshakes or fries but
not both.
O Diego is maximizing his utility only if one milkshake and one order of French fries have the same price.
O Diego is maximizing his utility only if the price of one milkshake is twice of the price of one order of
French fries.
O Diego is maximizing his utility.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education