If the price of T decreases from $5 to $3, while the price of S and the consumer's income stay the same, then the utility-maximizing combination is such that the quantity of Multiple Choice increases from 2 to 4. stays the same at 2, but the consumer has $1 remaining. decreases from 4 to 3.

If the price of T decreases from $5 to $3, while the price of S and the consumer's income stay the same, then the utility-maximizing combination is such that the quantity of Multiple Choice increases from 2 to 4. stays the same at 2, but the consumer has $1 remaining. decreases from 4 to 3.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The table shows the total utility data for products S and T. Assume that the prices of S and T are $3 and $5, respectively, and that consumer income is $22.
Total Utility
12
27
39
48
51
Units of S
1
2
3
4
5
Multiple Choice
If the price of T decreases from $5 to $3, while the price of S and the consumer's income stay the same, then the utility-maximizing combination is such that the quantity of T
increases from 2 to 4.
Units of T
1
2
3
4
5
Total Utility
20
35
45
50
52
decreases from 4 to 3.
stays the same at 2, but the consumer has $1 remaining.
increases from 2 to 3, but the consumer has $1 remaining.

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