x
Select Test Select Question Types

Subject - Economics:

Microeconomics

MCQ - 12-4022

Question:

Every day Melanie spends her lunch money consuming apples, at $1 each, and oranges, at $2 each. At her current level of consumption, Melanie’s marginal utility of apples is 12 and her marginal utility of oranges is 18. If she has already spent all of her lunch money, how should Melanie change her consumption decision to maximize utility?

  1. She should make no changes; she is consuming the utility maximizing combination of apples and oranges.
  2. She should increase her apple consumption and decrease her orange consumption until the marginal utility per dollar is equal for both.
  3. She should decrease her apple consumption and increase her orange consumption until the marginal utility per dollar is equal for both.
  4. She should increase her apple consumption and decrease her orange consumption until the marginal utility per dollar is equal for both.
  5. She should decrease her apple consumption and increase her orange consumption until the marginal utility is equal for both.

Correct Answer: B

Explanation:

The utility maximizing rule requires that MU/P is equal for both goods. Now the MU/P is greater for apples than for oranges. Melanie consumes more apples and fewer oranges, which lowers MU of apples and increases the MU of oranges.

Previous Question
Next Question
Back to Section

Record Performance

269 MCQ for effective preparation of the test of Microeconomics of Economics section.

Read the MCQ statement: Every day Melanie spends her lunch money consuming apples, at $1 each, and oranges, at $2 each. At her current level of consumption, Melanie’s margina .... aximize utility? , keenly and apply the method you have learn through the video lessons for Microeconomics to give the answer. Record your answer and check its correct answer and video explanation for MCQ No. 12-4022.

How to Answer

Solve the question for MCQ No. and decide which option (A through D/E) is the best choice to answer the MCQ, then click/tap the blue button to view the correct answer and it explanation.

Share This Page

Full Films
Full Films
TV Serials
TV Serials
Short Films
Short Films
Upcoming Films
Upcoming Films