Asked by Anthony Flesher on Jul 21, 2024
Verified
A consumer is attempting to maximize utility in her consumption of goods A and B.If her income and the price of good A do not change but the marginal utility of good B is constant and the price of good B decreases,this will _____ utility per dollar spent on good B.
A) decrease the marginal
B) not affect the marginal
C) decrease the total
D) increase the marginal
Marginal Utility
The additional satisfaction or utility gained from consuming an additional unit of a good or service.
Utility Per Dollar
Represents the amount of satisfaction or pleasure received per unit of expenditure.
Good
A tangible or intangible product that can satisfy a need or desire, and is transferable from one person to another.
- Ascertain the determinants impacting the marginal utility of goods and services.
Verified Answer
CL
Connor LawrenceJul 23, 2024
Final Answer :
D
Explanation :
If the price of good B decreases while the marginal utility of good B remains constant and the consumer's income and the price of good A do not change, the consumer will be able to purchase more of good B for the same amount of money. This means that the consumer will be able to consume more of good B, which will increase the marginal utility of good B. Therefore, the consumer will be able to achieve a higher level of total utility per dollar spent on good B, which is an increase in the marginal utility of good B.
Learning Objectives
- Ascertain the determinants impacting the marginal utility of goods and services.
Related questions
Freddy Has Eaten Three Corn Dogs at the County Fair,and ...
If Total Utility Has Reached a Maximum Level, and Assuming ...
Children Who Dislike Brussels Sprouts Exemplify the Notion That the ...
If the Total Utility from Consuming Five Units of a ...
To the Average Consumer, the Marginal Utility of a Second ...