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Suppose that Ms. Thomson is currently exhausting her money income by purchasing 10 units of A and 8 units of B at prices of $8

Suppose that Ms. Thomson is currently exhausting her money income by purchasing 10 units of A and 8 units of B at prices of $8 and $2, respectively. The marginal utility of the last units of A and B are 24 and 10, respectively. These data suggest that Ms. Thomson

  • has preferences that are at odds with the principle of diminishing marginal utility.
  • considers A and B to be complementary goods.
  • should buy more A and less B.
  • should buy more B and less A.

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