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Assume you spend all of your income on two goods: peanuts and chips. Also assume that you are consuming the combination of peanuts and chips that maximize your utility. Which of the following statements
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Assume you spend all of your income on two goods: peanuts and chips. Also assume that you are consuming the combination of peanuts and chips that maximize your utility. Which of the following statements is true?a. if the price of peanuts is equal to the price of chips, then the marginal utilities must also be equalb. if the price of peanuts is less than the price of chips, then the marginal utility of peanuts is more than the marginal utility of chipsc. the marginal utilities of the two goods and their prices are not related

User Arsen
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2 Answers

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Answer:

uwu the answer is A)

Step-by-step explanation:

User Turbo
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2 votes

Answer:

The correct answer is option a.

Step-by-step explanation:

In the consumption of two commodities, the total utility is maximized when the ratio of marginal utility and price of the product is the same for both the goods.

A person is consuming two goods, peanuts and chips. The individual is able to maximize total utility. If the price of peanuts and chips are equal, this means that the marginal utilities derived from the consumption of these two must be equal.

User Nullbyte
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