Chapter4: Utility Maximization And Choice
Section: Chapter Questions
Problem 4.12P
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True/False/Uncertain:
1. In taking an exam, Atack, a rational student, allocates his time to the various questions so as to equalize his
marginal point utility per minute on all questions.
2. The
housing) and the marginal utility declines as more food is consumed; likewise for housing. Therefore,
both food and housing are normal goods. (Hint: Express the optimality condition for Zecher’s [UMP], MUF/MUH = PF/PH. Notice that PF/PH is fixed. If all of an increase in income is spent on F, can the equality be maintained?)
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