Additional car is 2000 units and the marginal utility from, Ask an Expert

Economics

For david, the marginal utility from an additional car is 2,000 units and the marginal utility from an additional vacation is 1,000 units. David is allocating all his budget. Hence to maximize his utility, David will

a. save his budget by not spending it until he can afford both the car and the vacation.

b. shift his consumption from the vacation to the car

c. possibly do something, but there is not enough information available to determine what he would do.

d. shift his consumption from the car to the vacation

e. buy both the car and the vacation now.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M974553

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