Peanut butter (PB) sells for 10 dollars per pound and Oysters (O) sell for 50 dollars per pound. Suppose Pat buys 5 pounds of peanut butter and one pound of oysters each month. With this consumption bundle, his MRSP B,O = 3. Which of the following is true (assuming Pat’s preferences satisfy all the basic assumptions of consumer theory)? (a) Pat could increase his utility by buying more oysters and less peanut butter. (b) Pat could increase his utility by buying more peanut butter and less oysters. (c) Pat could increase his utility by buying more peanut butter and more oysters. (d) Pat could increase his utility by buying less peanut butter and less oysters.
Peanut butter (PB) sells for 10 dollars per pound and Oysters (O) sell for 50 dollars per pound. Suppose Pat buys 5 pounds of peanut butter and one pound of oysters each month. With this consumption bundle, his MRSP B,O = 3. Which of the following is true (assuming Pat’s preferences satisfy all the basic assumptions of consumer theory)? (a) Pat could increase his utility by buying more oysters and less peanut butter. (b) Pat could increase his utility by buying more peanut butter and less oysters. (c) Pat could increase his utility by buying more peanut butter and more oysters. (d) Pat could increase his utility by buying less peanut butter and less oysters.
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter20: Consumer Choice And Elasticity
Section: Chapter Questions
Problem 4CQ
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22. Peanut butter (PB) sells for 10 dollars per pound and Oysters (O) sell for 50 dollars per
pound. Suppose Pat buys 5 pounds of peanut butter and one pound of oysters each month.
With this consumption bundle, his MRSP B,O = 3. Which of the following is true (assuming
Pat’s preferences satisfy all the basic assumptions of consumer theory)?
(a) Pat could increase his utility by buying more oysters and less peanut butter.
(b) Pat could increase his utility by buying more peanut butter and less oysters.
(c) Pat could increase his utility by buying more peanut butter and more oysters.
(d) Pat could increase his utility by buying less peanut butter and less oysters.
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