Question 49
MediumOriginal questionA consumer's marginal utility from good X, measured in rupees, is:
| Unit of good X | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| MU (in ₹) | 30 | 25 | 20 | 15 | 10 |
If the price of X is ₹25, how much will he spend on X?
Show the answer and explanation
CorrectNot quiteAnswer B
Correct answer: B
Explanation
At ₹25 he buys up to the unit whose MU is ₹25: the 2nd unit.
Spending = 2 × ₹25 = ₹50.
Worth noting
₹55 adds the MUs of 2 units; spending is quantity times price.
- Concept
- Spending at equilibrium
- Typical timeTypical
- 70 s
- Your timeYours
- —
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