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marishachu [46]
3 years ago
9

Suppose for a given consumer the marginal utility (MU) of a pizza is 100 utils and the MU of a hamburger is 80 utils, and that t

he price of a pizza is $15 and the price of a hamburger is $8. Given this information, the consumer ___________ in equilibrium, and should _________________.
Business
1 answer:
NemiM [27]3 years ago
3 0

Answer:

<u>is not</u> , <u>consume more of hamburgers</u>

Explanation:

A consumer is said to have achieved equilibrium when within his budget constraint, he purchases that combination of two goods which yield maximum satisfaction to him.

The equation for consumer equilibrium for two products is given by

\frac{MU_{x} }{P_{x} } = \frac{MU_{y} }{P_{y} }

In the given case, \frac{MU_{x} }{P_{x} } = \frac{100}{15} = \frac{20}{3} = 6.666

                            \frac{MU_{y} }{P_{y} } = \frac{80}{10}    = 8

wherein, x= pizza

              y= hamburger

As is evident, the marginal utility per dollar spent is greater in case of a hamburger, the consumer is not in a state of equilibrium.

Thus, he should consume more units of Hamburgers in order to maximize his utility.

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Answer:

The correct answer is (C)

Explanation:

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3 years ago
The wall separating Henri from his manager made it hard to hear what his manager was saying. The wall is an example of a(n) ____
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2 years ago
Gunk Co. reported an asset retirement obligation on its 2019 financial statements. The present value of the liability for the as
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