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Consumer Equilibrium

53. A consumer spends all of her income on two goods, coffee and doughnuts. She purchases coffee at 25 cents a unit with a total utility of 800 and a marginal utility of 12. Doughnuts are purchase at 75 cents a unit with a total utility of 200 and a marginal utility of 24. In order to reach consumer equilibrium, she should consume:
A) less doughnuts and more coffee.
B) more doughnuts but the same amount of coffee.
C) more coffee but the same amount of doughnuts.
D) more doughnuts and less coffee.
E) the same amount of coffee and doughnuts.

Solution Preview

53. A consumer spends all of her income on two goods, coffee and doughnuts. She purchases coffee at 25 cents a unit with a total utility of 800 and a marginal utility of 12. Doughnuts are purchase at 75 cents a unit with a total utility of 200 and a marginal utility of 24. In order to reach consumer equilibrium, she should consume:
A) less doughnuts and more ...

Solution Summary

A multiple choice question on Consumer Equilibrium has been answered.

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