58 599
Assignments Done
98,6%
Successfully Done
In March 2018
Your physics homework can be a real challenge, and the due date can be really close — feel free to use our assistance and get the desired result.
Be sure that math assignments completed by our experts will be error-free and done according to your instructions specified in the submitted order form.

# Answer on Economics of Enterprise Question for abdouli

Question #32633
Assume that product Alpha and product Beta are both priced at $1 per unit and that Salem has$20 to spend on Alpha and Beta. He buys 8 units of Alpha and 12 units of Beta. The marginal utility of Alpha is 40 and the marginal utility of Beta is 20. This indicates that:

Assume that product Alpha and product Beta are both priced at $1 per unit and that Salem has$20 to spend on Alpha and Beta. He buys 8 units of Alpha and 12 units of Beta. The marginal utility of Alpha is 40 and the marginal utility of Beta is 20. This indicates that:

a- Salem should make no change in consumption.
c- in order to maximize utility, Salem should buy more of Beta and less of Alpha.
d- in order to maximize utility, Salem should buy more of Alpha and less of Beta.
In order to maximize utility MUa/Pa = MUb/Pb. As this equality isn&#039;t right in our case, Salem shoud buy more of Alpha, as with the same price it gives higher marginal utility.
So, the right answer is d.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!