Ask Question
16 November, 20:44

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 units of utility and the marginal utility from the fourth bag of almonds is also 18. Is Adhira maximizing her utility?

+3
Answers (1)
  1. 16 November, 21:01
    0
    Cannot be determined

    Explanation:

    If the marginal utility of the third chocolate bar is 18 units of utility and the marginal utility from the fourth bag of almonds is also 18.

    For it to be determined if Adhira is maximizing her utility, we need to compare the different units of utility per product to the individual prices of the product.

    The Utility Maximization rule states that consumers decide to allocate their money incomes so that the last dollar spent on each product purchased yields the same amount of extra marginal utility.

    It is marginal utility per dollar spent that is equalized. and not absolute utility.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “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 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers