Business, 18.02.2020 20:58 ld966057

An art student spends all of her income on pencils and drawing pads. The student currently buys 30 pencils at $1 each and 10 pads at $5 each. If the marginal utility of the 30th pencil is 100 utils and the marginal utility of the 10th pad is 400 utils, to maximize utility the student should change her purchases of pencils and pads in which of the following ways?
Pencils Pads
a. Not change Buy more
b. Buy more Buy more
c. Buy more Buy less
d. Buy less Buy more
e. Buy less Buy less

Answers: 3

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Answer from: danielahumajova6

The two possible ways to maximize utility are:

c. Buy more pencils Buy less pads to increase the marginal utility of the pencils which is currently less than the marginal untility of the pads.d. Buy less pads Buy more pencils , for the same previous reason: to increase the marginal utility of the pencils which is currently less than the marginal untility of the pads.

Explanation:

The maximum utility is obtained when the marginal utilities of both pencils and pads are equal.

Right now, the student is spending all his money, and obtaining different marginal utilities, thus he should change his strategy: increase the marginal utility of the pencils at the expense of decrease the marginal utility of the pads.

Then, to maximize the utility, the student must buy more pencils and buy less pads.

As per the options:

a. Not change Buy more does not work because to buy more of any of the items he/she must buy less of the other because the budget is covered with the current combination.

b. Buy more Buy more impossible for the same previous reason: the budget is covered.

c. Buy more pencils Buy less pads to increase the marginal utility of the pencils which is currently less than the marginal untility of the pads.

d. Buy less pads Buy more pencils , for the same previous reason: to increase the marginal utility of the pencils which is currently less than the marginal untility of the pads.

e. Buy less Buy less , does not maximize the utility because some part of the budget would not be used.

Answer from: Quest

answer: a. the kind of population living in your neighbourhood.

the census explorer data tool by the us census bureau allows the user to zoom in on any neighbourhood within the united states and find the kind of people residing in that by race and age.

the tool needs to needs to be used twice – once in order to find what type of people reside in a neighbourhood, and then to see the age groups of the people in the same neighbourhood.

Answer from: Quest

answer; only identify and interpret trends in the marketplace;

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An art student spends all of her income on pencils and drawing pads. The student currently buys 30 p...

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