Question

According to the utility-maximizing rule, if your last two purchases were $40 workout shorts and $80 running shoes, the marginal utility of the running shoes should be

Group of answer choices:

twice the marginal utility from the workout shorts.

the same as the marginal utility from the workout shorts.

one-half the marginal utility from the workout shorts.

exactly equal to 80 units of utility.

Answer 1

ANSWER-

According to the utility-maximizng rule the consumer maximises the satisfaction when the last dolaar spent on each good gives same satisfaction (marginal utility). It means as per this rule consumer will consume that combination of good which gives him same level of satisfaction by consuming both the goods or services.

So, According to the utility-maximizing rule, if your last two purchases were $40 workout shorts and $80 running shoes, the marginal utility of the running shoes should be the same as the marginal utility from the workout shorts.

Hence, the answer is option 2. the same sa the marginal utility from the workout shoes.