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consumer will purchase only 1 unit of the product represented by these data since that amo

consumer will purchase only 1 unit of the product represented by these data since that amo

consumer will purchase only 1 unit of the product represented by these data since that amount maximizes marginal utility.” Do you agree? Explain why or why not.

c. “It is possible that a rational consumer will not purchase any units of the product represented by these data.” Do you agree? Explain why or why not.

2. Mrs. Simpson buys loaves of bread and quarts of milk each week at prices of $1 and 80 cents, respectively. At present she is buying these products in amounts such that the marginal utilities from the last units purchased of the two products are 80 and 70 utils, respectively. Is she buying the utility-maximizing combination of bread and milk? If not, how should she reallocate her expenditures between the two goods?

Abhinav 05-Dec-2019

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