If a rational consumer is in equilibrium, which of the followingconditions will

Question

If a rational consumer is in equilibrium, which of the followingconditions will hold true?

A.MUa= MUb=MUc= …..=MUn.

B.The marginal utility of each good purchased will be zero.

C.The marginal utility of the last dollar spent on each goodpurchased will be the same.

D.The total utility obtained from each good purchased will bethe same.

Suppose that Ms. Spencer is currently exhausting her moneyincome by purchasing 10 units of A and * units of B at prices of $2and respectively. The marginal utility of the last units of A and Bare 16 and 24 respectively. These data suggest that Ms.Spencer:

A.has preferences that are odds with the principle ofdiminishing marginal utility.

B.considers A and B to be complementary gods.

C.should buy less A and more B.

D.should buy less B and more A.

The marginal utility of the last unit of A consumed is 12 andthe marginal utility of the last unit of B consumed is 8. What setof prices for A and B respectively would be consistent withconsumer equilibrium?

A.$4 and $6

B.$6 and $4

C.$8 and $12

Explanation / Answer

1. choice A    MUa = MU b = MU c = .... MU n. 2.Choice C    should buy less A and more B. 3.Choice B. $ 6 and $ 4.      12 = 2 ;   8 = 2      6            4

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