Peanut butter (PB) sells for 10 dollars per pound and Oysters (O) sell for 50 dollars per pound. Suppose Pat buys 5 pounds of peanut butter and one pound of oysters each month. With this consumption bundle, his MRSP B,O = 3. Which of the following is true (assuming Pat’s preferences satisfy all the basic assumptions of consumer theory)? (a) Pat could increase his utility by buying more oysters and less peanut butter. (b) Pat could increase his utility by buying more peanut butter and less oysters. (c) Pat could increase his utility by buying more peanut butter and more oysters. (d) Pat could increase his utility by buying less peanut butter and less oysters.
Peanut butter (PB) sells for 10 dollars per pound and Oysters (O) sell for 50 dollars per pound. Suppose Pat buys 5 pounds of peanut butter and one pound of oysters each month. With this consumption bundle, his MRSP B,O = 3. Which of the following is true (assuming Pat’s preferences satisfy all the basic assumptions of consumer theory)? (a) Pat could increase his utility by buying more oysters and less peanut butter. (b) Pat could increase his utility by buying more peanut butter and less oysters. (c) Pat could increase his utility by buying more peanut butter and more oysters. (d) Pat could increase his utility by buying less peanut butter and less oysters.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
22. Peanut butter (PB) sells for 10 dollars per pound and Oysters (O) sell for 50 dollars per
pound. Suppose Pat buys 5 pounds of peanut butter and one pound of oysters each month.
With this consumption bundle, his MRSP B,O = 3. Which of the following is true (assuming
Pat’s preferences satisfy all the basic assumptions of consumer theory)?
(a) Pat could increase his utility by buying more oysters and less peanut butter.
(b) Pat could increase his utility by buying more peanut butter and less oysters.
(c) Pat could increase his utility by buying more peanut butter and more oysters.
(d) Pat could increase his utility by buying less peanut butter and less oysters.
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