Exhibit 6-6 Marginal utility for data for clothes and amusement
Quantity
Clothes
Amusement
1
15
20
2
13
18
3
10
15
4
8
12
5
6
10
Refer to Exhibit 6-6. Your budget is $50. The price of amusement goods is $10. If the price of clothes falls to $4, which of the following statements is true?
A. The marginal-utility-to-price ratio for clothes will decrease.
B. The marginal-utility-to-price ratio for clothes will increase.
C. The quantity demanded of clothes will decrease.
D. The quantity demanded for amusement goods will remain constant.
Answer: B
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