Use the following table to answer the question below. Cloe is given $4 of pocket money to be spent on either hard candies or chocolates. Chocolates cost 40 cents and hard candies 80 cents each. The marginal utilities derived from the consumption of each product are as shown in the following tableNumber of ItemsMarginal Utility of ChocolatesMarginal Utility of Hard Candies160150250140340120430100520806107075508020Based on taste and preference alone, which good does Cloe prefer?

A. One cannot tell from the given data.
B. chocolates
C. hard candies
D. Cloe equally likes chocolates and hard candies.


Answer: C

Economics

You might also like to view...

If a firm's demand curve in a monopolistically competitive market is shifting left:

A. competition is likely entering with similar products. B. firms must be exiting the industry. C. economic profits must be increasing. D. None of these statements is true.

Economics

What may limit the size of the money supply expansion to an amount less than indicated by the oversimplified deposit creation formula?

Economics

The most likely way the public debt burdens future generations, if at all, is by:

A. reducing the current level of investment. B. reducing real interest rates. C. causing deflation. D. causing future unemployment.

Economics

In Figure 22.1, which area represents producer surplus to the drug dealer? 

A. AP*C B. 0P*CQ* C. 0BCQ* D. BP*C

Economics