Question 23 Diego spends all of his income on milkshakes and French fries. At his current consumption level the marginal utility of one milkshake is double of the marginal utility of one order of French fries. According to the optimal consumption rule: O Diego will maximize his utility by specializing in consumption and buying either milkshakes or fries but not both. O Diego is maximizing his utility only if one milkshake and one order of French fries have the same price. O Diego is maximizing his utility only if the price of one milkshake is twice of the price of one order of French fries. O Diego is maximizing his utility.
Question 23 Diego spends all of his income on milkshakes and French fries. At his current consumption level the marginal utility of one milkshake is double of the marginal utility of one order of French fries. According to the optimal consumption rule: O Diego will maximize his utility by specializing in consumption and buying either milkshakes or fries but not both. O Diego is maximizing his utility only if one milkshake and one order of French fries have the same price. O Diego is maximizing his utility only if the price of one milkshake is twice of the price of one order of French fries. O Diego is maximizing his utility.
Chapter10: Consumer Choice Theory
Section: Chapter Questions
Problem 9P
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23
Transcribed Image Text:Question 23
Diego spends all of his income on milkshakes and French fries. At his current consumption level
the marginal utility of one milkshake is double of the marginal utility of one order of French
fries. According to the optimal consumption rule:
O Diego will maximize his utility by specializing in consumption and buying either milkshakes or fries but
not both.
O Diego is maximizing his utility only if one milkshake and one order of French fries have the same price.
O Diego is maximizing his utility only if the price of one milkshake is twice of the price of one order of
French fries.
O Diego is maximizing his utility.
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