Asked by chikatimalla bhargavi on Jun 12, 2024
Verified
Wolfgang really likes both rutabagas and broccoli.Suppose the price of each good is $0.60 per pound and Wolfgang is maximizing utility,consuming 5 pounds of rutabagas and 0.5 pound of broccoli per month.At the point of maximal utility,the marginal utility of:
A) the two goods is the same.
B) rutabagas is greater than that of broccoli.
C) broccoli is greater than that of rutabagas.
D) both goods is zero.
Marginal Utility
The additional satisfaction or utility a consumer receives from consuming one additional unit of a good or service.
Rutabagas
A root vegetable with a taste that is a mixture of cabbage and turnip, commonly used in cooking.
Broccoli
A green vegetable with a large flowering head, stalk, and small associated leaves, often eaten for its nutritional qualities.
- Understand the concept of achieving equal marginal utility per dollar spent for utility maximization.
Verified Answer
SN
Sherise NutzmannJun 14, 2024
Final Answer :
A
Explanation :
At the point of maximal utility, according to the principle of equal marginal utility per dollar spent, the marginal utility of the two goods must be the same. This ensures that the consumer is allocating their budget in a way that maximizes their overall satisfaction.
Learning Objectives
- Understand the concept of achieving equal marginal utility per dollar spent for utility maximization.