Suppose Lucia has to choose between purchasing high-definition televisions and water. Which of the following is the utility-maximizing rule that Lucia should follow while choosing the optimal quantities of these two goods? (Note: In the answer options that follow, MU stands for "marginal utility.") O (MU of Water) x (Price of Water) - (MU of HDTVs) x (Price of HDTVs) O MU of Water = MU of HDTVs O MU of HDTVs MU of Water Price of HDTVs Price of Water O MU of Water Price of Water MU of HDTVs Price of HDTV Since water costs little and high-definition televisions are expensive, it must follow that when people choose their optimal quantities of water and high-definition televisions to purchase, the marginal utility they receive from the last high-definition television they buy is than the marginal utility they receive from the last gallon of water they buy.

Suppose Lucia has to choose between purchasing high-definition televisions and water. Which of the following is the utility-maximizing rule that Lucia should follow while choosing the optimal quantities of these two goods? (Note: In the answer options that follow, MU stands for "marginal utility.") O (MU of Water) x (Price of Water) - (MU of HDTVs) x (Price of HDTVs) O MU of Water = MU of HDTVs O MU of HDTVs MU of Water Price of HDTVs Price of Water O MU of Water Price of Water MU of HDTVs Price of HDTV Since water costs little and high-definition televisions are expensive, it must follow that when people choose their optimal quantities of water and high-definition televisions to purchase, the marginal utility they receive from the last high-definition television they buy is than the marginal utility they receive from the last gallon of water they buy.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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