If the price of a good falls, before the amount consumed changes the marginal utility per dollar from that good a. might either increase or decrease depending on whether the good is a substitute or a complement. b. More information is needed to determine the answer. C. increases. d. decreases.

If the price of a good falls, before the amount consumed changes the marginal utility per dollar from that good a. might either increase or decrease depending on whether the good is a substitute or a complement. b. More information is needed to determine the answer. C. increases. d. decreases.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

If the price of a good falls, before the amount consumed changes the marginal utility per
dollar from that good
a. might either increase or decrease depending on whether the good is a substitute or
a complement.
b. More information is needed to determine the answer.
C.
increases.
d. decreases.

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Bob consumes food and housing. Suppose his marginal utility from an additional unit of food is 20 and his marginal utility from an additional unit of housing is 180. Furthermore, suppose the price of a unit of food is $1.00 and the price of a unit of housing is $2.00. Can Bob increase his utility without changing his total expenditures on food and housing? Holding expenditures constant, A. Bob can increase utility by spending more on food and less on housing. B. Bob can increase utility by spending more on food and the same amount on housing. C. Bob can increase utility by spending less on food and more on housing. D. Bob cannot increase his utility. E. Bob can increase utility by spending more on food and more on housing.
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