Adhira buys chocolates and almonds. She has 3 bars of chocolates and 4 bags of almonds. The marginal utility of the third chocolate bar is 18 of marginal utility and the marginal utility from the fourth bag of almonds is also 18. Is Adhira maximizing her utility? A. Yes, the marginal utility from the last unit of each good is equal. B. No, she must cut back to 3 bags of almonds to equate her quantities of the two goods. C. No, she must buy 1 more chocolate bar to equate her quantities of the two goods. D. No, without information on her income and the prices of the two goods, we cannot answer the question.

Question

Business

Danica Wilkins

6 May, 04:24

Adhira buys chocolates and almonds. She has 3 bars of chocolates and 4 bags of almonds. The marginal utility of the third chocolate bar is 18 of marginal utility and the marginal utility from the fourth bag of almonds is also 18. Is Adhira maximizing her utility? A. Yes, the marginal utility from the last unit of each good is equal. B. No, she must cut back to 3 bags of almonds to equate her quantities of the two goods. C. No, she must buy 1 more chocolate bar to equate her quantities of the two goods. D. No, without information on her income and the prices of the two goods, we cannot answer the question.

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Answers (1)

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Karley Wilkerson · Answer 1

The correct answer is option D.

Explanation:

Adhira is purchasing two goods, chocolates and almonds.

She buys 3 bars of chocolates and 4 bags of almonds.

The marginal utility from the last bar of chocolate is 18.

The marginal utility from the last bag of almonds is also 18.

In order to maximize utility, the ratio of marginal utility and price for both the goods should be equal.

As we do not know the price of the two goods or Adhira's income we cannot find if the utility is being maximized or not.