Peanut butter (PB) sells for 10 dollars per pound and Oysters (O) sell for 50 dollars per pound. Suppose Pat buys 5 pounds of peanut butter and one pound of oysters each month. With this consumption bundle, his MRSP B,O = 3. Which of the following is true (assuming Pat’s preferences satisfy all the basic assumptions of consumer theory)? (a) Pat could increase his utility by buying more oysters and less peanut butter. (b) Pat could increase his utility by buying more peanut butter and less oysters. (c) Pat could increase his utility by buying more peanut butter and more oysters. (d) Pat could increase his utility by buying less peanut butter and less oysters.
Peanut butter (PB) sells for 10 dollars per pound and Oysters (O) sell for 50 dollars per pound. Suppose Pat buys 5 pounds of peanut butter and one pound of oysters each month. With this consumption bundle, his MRSP B,O = 3. Which of the following is true (assuming Pat’s preferences satisfy all the basic assumptions of consumer theory)? (a) Pat could increase his utility by buying more oysters and less peanut butter. (b) Pat could increase his utility by buying more peanut butter and less oysters. (c) Pat could increase his utility by buying more peanut butter and more oysters. (d) Pat could increase his utility by buying less peanut butter and less oysters.
Chapter10: Consumer Choice Theory
Section: Chapter Questions
Problem 9P
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22. Peanut butter (PB) sells for 10 dollars per pound and Oysters (O) sell for 50 dollars per
pound. Suppose Pat buys 5 pounds of peanut butter and one pound of oysters each month.
With this consumption bundle, his MRSP B,O = 3. Which of the following is true (assuming
Pat’s preferences satisfy all the basic assumptions of consumer theory)?
(a) Pat could increase his utility by buying more oysters and less peanut butter.
(b) Pat could increase his utility by buying more peanut butter and less oysters.
(c) Pat could increase his utility by buying more peanut butter and more oysters.
(d) Pat could increase his utility by buying less peanut butter and less oysters.
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