Paul consumes only books and DVDs. At his current consumption bundle, his marginal utility from DVDs...

 

Transcribed Image Text:

Paul consumes only books and DVDs. At his current consumption bundle, his marginal utility from DVDs is 23 and from books is 2. Each DVD costs $19, and much book costs $2. Is he maximizing his utility? Explain. Let MU, be the marginal utility of books, MU, be the marginal utility from DVDs. P be the price of books, P., be the price of DVDs, and MRS be the marginal rate of stution Paul is MUB MUD OA not maximizing his utility because Pa PD MU OB maximizing his utility because Pa Oo maximizing his utility because MRS- MUD PD MU MUD OD not maximizing his utility because MRS < MU MUD MU MUD O maximizing his utility because PR Po Paul consumes only books and DVDs. At his current consumption bundle, his marginal utility from DVDs is 23 and from books is 2. Each DVD costs $19, and much book costs $2. Is he maximizing his utility? Explain. Let MU, be the marginal utility of books, MU, be the marginal utility from DVDs. P be the price of books, P., be the price of DVDs, and MRS be the marginal rate of stution Paul is MUB MUD OA not maximizing his utility because Pa PD MU OB maximizing his utility because Pa Oo maximizing his utility because MRS- MUD PD MU MUD OD not maximizing his utility because MRS < MU MUD MU MUD O maximizing his utility because PR Po

Answer rating: 100% (QA)

Question The following info... View the full answer