Frank spends $75 on 10 magazines and 25 newspapers. The magazines cost $5 each and the newspapers
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Frank spends $75 on 10 magazines and 25 newspapers. The magazines cost $5 each and the newspapers cost $2.50 each. Suppose that his MU from the final magazine is 10 utils while his MU from the final newspaper is also 10 utils. According to the utility-maximizing rule, Frank should:
a. Reallocate spending from magazines to newspapers.
b. Reallocate spending from newspapers to magazines.
c. Be satisfied because he is already maximizing his total utility.
d. None of the above.
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Related Book For
Microeconomics Principles, Problems and Policies
ISBN: 978-1259450242
20th edition
Authors: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn
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