Her utility function exhibits a diminishing marginal rate of subs equi-marginal principle to decide how much to purchase of each For Maria's current consumption bundle it holds that MUA MUB MUC РА PB PC You may assume that she has spent her entire budget. If Mar itility neyt week she should

K Paul consumes only books and DVDs. At his current consumption bundle, his marginal utility from DVDS is 25 and from books is 3. Each DVD costs $13, and each book costs $2. Is he maximizing his utility? Explain. Let MUB be the marginal utility of books, MUD be the marginal utility from DVDs, PB be the price of books, Pp be the price of DVDs, and MRS be the marginal rate of substitution. Paul is OA. maximizing his utility because MUB PB = MUD PD MUB MUD OB. not maximizing his utility because < PB PD MUB OC. maximizing his utility because MRS = MUD MUB MUD OD. maximizing his utility because < PB PD MUB O E. not maximizing his utility because MRS < MUD If he is not, how can he increase his utility while keeping his total expenditure constant? Paul could increase utility while keeping total expenditures constant by consuming more and fewer

Marginal utility is negative only when quantity demanded is negative. Select one: O a. True Ob. False Clear my choice 4

ê Suppie Concumer bes a utility function 4 x, (x,+2=) and facer a M. 'Derive and giet ber dem and for goed 2.