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Answer to Question #64007 in Other Economics for Faisal

Question #64007
If I conclude that I should see fewer movies and go to more football games, the marginal utility of the last dollar spent on movies is the marginal utility of the last dollar spent on football games.

a) more than
b) less than
c) increasing more rapidly than
d) diminishing more rapidly than 1
Please do tell which is right answer and why?
Expert's answer
If you conclude that you should see fewer movies and go to more football games, the marginal utility of the last dollar spent on movies (MUm/Pm) is less than the marginal utility of the last dollar spent on football games (MUf/Pf), because in equilibrium MUm/Pm = MUf/Pf.
So, the correct answer is:
b) less than

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