True or false; explain your reasoning. Given a typical demand curve, a decline i

Question

True or false; explain your reasoning. Given a typical demand curve, a decline in price faced by the consumer should lead her to increase the quantity purchased in order to maximize her total utility 4. A bottle of wine costs $8 and a quiche costs $5. At Robert's present levels of consumption, he spends all his income and receives marginal utility of S10 from the last bottle of wine and marginal utility of $4 from the last quiche 5. a. Explain to Robert how you know he is not maximizing his total utility Give Robert advice about how to adjust his purchases -i.e., should he buy more wine and less quiche or more quiche and less wine? Explain your reasoning. b.

Explanation / Answer

4. True

Decrease in price increases the purchasing power of consumer so he or she is able to consume more amount of good with his given income. This maximises consumers utility because more good is purchased from the same income.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.