Answer on Economics of Enterprise Question for abdouli
a- Salem should make no change in consumption.
b-given another dollar, Salem should buy an additional unit of Beta.
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'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.
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