Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A consumer spends all of his money on two goods: apples and oranges. The consumer will pay $10 for apples, but only $1 for oranges.
A consumer spends all of his money on two goods: apples and oranges. The consumer will pay $10 for apples, but only $1 for oranges. Why does the consumer pay more for apples?
1) His marginal utility from apples is higher than his marginal utility from oranges.
2) His marginal utility from oranges is higher than his marginal utility from oranges.
3) The consumer is irrational and simply likes apples better.
4) His total utility is higher from apples than oranges.
5) His total utility is higher from oranges than apples.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started