Suppose Susan has to choose between purchasing high-definition televisions and milk. Which of the following is the utility-maximizing rule that Susan 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 Milk = MU of HDTVS O (MU of Milk) × (Price of Milk) = (MU of HDTVS) × (Price of HDTVS) MU of Milk MU of HDTVS Price of HDTVS Price of Milk MU of Milk MU of HDTVS Price of Milk Price of HDTVS Since milk costs little and high-definition televisions are expensive, it must follow that when people choose their optimal quantities of milk 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 milk they buy.

Suppose Susan has to choose between purchasing high-definition televisions and milk. Which of the following is the utility-maximizing rule that Susan 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 Milk = MU of HDTVS O (MU of Milk) × (Price of Milk) = (MU of HDTVS) × (Price of HDTVS) MU of Milk MU of HDTVS Price of HDTVS Price of Milk MU of Milk MU of HDTVS Price of Milk Price of HDTVS Since milk costs little and high-definition televisions are expensive, it must follow that when people choose their optimal quantities of milk 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 milk 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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