Question 21 1 pts A sandwich costs $5 and a can of soda costs $1. At Amber\'s pr

Question

Question 21 1 pts A sandwich costs $5 and a can of soda costs $1. At Amber's present levels of consumption, she spends all her income and receives marginal utility of $6 from the last sandwich and marginal utility of $0.25 from the last can of soda. To maximize her total utility, Amber should O buy fewer sandwiches and more soda O buy more sandwiches and less soda O spend all of his money on soda O buy equal amounts of sandwiches and soda 1 pts D Question 22 An inferior good is a good whose quantity demanded O rises when its price falls O falls when the price of related goods falls O falls when the consumer's total utility falls rises when the consumers income falls

Explanation / Answer

21)

Equilibirum MUs/ Ps = MU soda / P soda

6/5 > 0.25/1

1.2> .25

Hence, More Sandwich to be consumed.

Right answer is : Buy more sandwiches and less soda

12)

Right answer is : Rises when consumer income falls

Demand for inferior good is high when income of consumer falls. consumer will switch to quality good when his income rises.

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