Asked by Lucia Callista on Jun 28, 2024
Verified
Wolfgang really likes both rutabagas and broccoli.The price of each good is $0.60 per pound and Wolfgang is maximizing utility.At the point of maximal utility,the marginal utility of:
A) rutabagas and broccoli is the same.
B) rutabagas is greater than the marginal utility of broccoli.
C) broccoli is greater than the marginal utility of rutabagas.
D) both goods is zero.
Marginal Utility
The extra pleasure or benefit gained by a consumer from having an additional unit of a product or service.
Rutabagas
A root vegetable, often confused with turnips, known for its purple skin and yellow flesh; used in cooking for its mild, sweet flavor.
Broccoli
A green vegetable with a large flowering head, often eaten as food.
- Become familiar with the rule of equal marginal utility per dollar in the context of utility maximization.
Verified Answer
ZK
Zybrea KnightJul 04, 2024
Final Answer :
A
Explanation :
At the point of maximal utility, the consumer equates the marginal utility per dollar spent on each good. Since the price of both goods is the same and there is no information given on the marginal utility of each good, we can assume that at the point of maximal utility the marginal utility of rutabagas and broccoli is the same. Therefore, the best choice(s) for Wolfgang are to consume both rutabagas and broccoli in amounts that equate their marginal utility per dollar spent.
Learning Objectives
- Become familiar with the rule of equal marginal utility per dollar in the context of utility maximization.