Mrs. Arnold is spending all her money income by buying bottles of soda and bags of pretzels in such amounts that the marginal utility of the last bottle is 40 utils and the marginal utility of the last bag is 60 utils. The prices of soda and pretzels are $0.75 per bottle and $1 per bag, respectively. It can be concluded that Multiple Choice the two commodities are substitute goods. Mrs. Arnold should spend less on pretzels and more on soda. Mrs. Arnold should spend less on soda and more on pretzels. Mrs. Arnold is buying soda and pretzels in the utility-maximizing amounts.

Mrs. Arnold is spending all her money income by buying bottles of soda and bags of pretzels in such amounts that the marginal utility of the last bottle is 40 utils and the marginal utility of the last bag is 60 utils. The prices of soda and pretzels are $0.75 per bottle and $1 per bag, respectively. It can be concluded that Multiple Choice the two commodities are substitute goods. Mrs. Arnold should spend less on pretzels and more on soda. Mrs. Arnold should spend less on soda and more on pretzels. Mrs. Arnold is buying soda and pretzels in the utility-maximizing amounts.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 9P

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