1. Isobel consumes positive quantities of both jam and juice. The price of jam is 5 cents per unit and the price of juice is 10 cents per unit. Her marginal utility of jam is 10 and her marginal utility of juice is 5. a. We can't tell whether any of the other statements are true or false without knowing the quantities she consumes. b. Without changing her total expenditures on jam and juice, she could not increase her utility. c. Without changing her total expenditures, she could increase her utility by consuming more jam and less juice. d. She should spend more money on both jam and juice. e. Without changing her total expenditures, she could increase her utility by consuming more juice and less jam.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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1. Isobel consumes positive quantities of both jam and
juice. The price of jam is 5 cents per unit and the price
of juice is 10 cents per unit. Her marginal utility of jam
is 10 and her marginal utility of juice is 5.
a. We can't tell whether any of the other statements are true or false without knowing the quantities
she consumes.
b. Without changing her total expenditures on jam and juice, she could not increase her utility.
c. Without changing her total expenditures, she could increase her utility by consuming more jam
and less juice.
d. She should spend more money on both jam and juice.
e. Without changing her total expenditures, she could increase her utility by consuming more juice
and less jam.
Transcribed Image Text:1. Isobel consumes positive quantities of both jam and juice. The price of jam is 5 cents per unit and the price of juice is 10 cents per unit. Her marginal utility of jam is 10 and her marginal utility of juice is 5. a. We can't tell whether any of the other statements are true or false without knowing the quantities she consumes. b. Without changing her total expenditures on jam and juice, she could not increase her utility. c. Without changing her total expenditures, she could increase her utility by consuming more jam and less juice. d. She should spend more money on both jam and juice. e. Without changing her total expenditures, she could increase her utility by consuming more juice and less jam.
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