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Reeta buys only compact discs and tapes and spends all her income. The marginal utility from a compact disc is 30 and the marginal utility from a tape is 20. The price of a compact disc is INR 15 and the price of a tape is INR 10. To maximize her utility, Reeta should
- a)increase her consumption of compact discs
- b)Increase her consumption of tapes
- c)not change her consumption of compact discs and tapes
- d)lower the price of a tape
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
Reeta buys only compact discs and tapes and spends all her income. The...
MCCDs/PCDs=MUtape/Ptape. Reeta is already maximizing her utility.
Most Upvoted Answer
Reeta buys only compact discs and tapes and spends all her income. The...
Analysis:
To maximize her utility, Reeta should consider the marginal utility per rupee spent on each item.
Calculations:
- Marginal utility per rupee for a compact disc = 30 / 15 = 2
- Marginal utility per rupee for a tape = 20 / 10 = 2
Explanation:
- The marginal utility per rupee spent on both compact discs and tapes is the same at 2.
- This means that Reeta is getting the same level of satisfaction for each rupee spent on both items.
- Therefore, to maximize her utility, Reeta should not change her consumption of compact discs and tapes.
- Increasing the consumption of one item over the other would not lead to an increase in overall utility since the marginal utility per rupee is the same for both items.
To maximize her utility, Reeta should consider the marginal utility per rupee spent on each item.
Calculations:
- Marginal utility per rupee for a compact disc = 30 / 15 = 2
- Marginal utility per rupee for a tape = 20 / 10 = 2
Explanation:
- The marginal utility per rupee spent on both compact discs and tapes is the same at 2.
- This means that Reeta is getting the same level of satisfaction for each rupee spent on both items.
- Therefore, to maximize her utility, Reeta should not change her consumption of compact discs and tapes.
- Increasing the consumption of one item over the other would not lead to an increase in overall utility since the marginal utility per rupee is the same for both items.
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Reeta buys only compact discs and tapes and spends all her income. The marginal utility from a compact disc is 30 and the marginal utility from a tape is 20. The price of a compact disc is INR 15 and the price of a tape is INR 10. To maximize her utility, Reeta shoulda)increase her consumption of compact discsb)Increase her consumption of tapesc)not change her consumption of compact discs and tapesd)lower the price of a tapeCorrect answer is option 'C'. Can you explain this answer?
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Reeta buys only compact discs and tapes and spends all her income. The marginal utility from a compact disc is 30 and the marginal utility from a tape is 20. The price of a compact disc is INR 15 and the price of a tape is INR 10. To maximize her utility, Reeta shoulda)increase her consumption of compact discsb)Increase her consumption of tapesc)not change her consumption of compact discs and tapesd)lower the price of a tapeCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Reeta buys only compact discs and tapes and spends all her income. The marginal utility from a compact disc is 30 and the marginal utility from a tape is 20. The price of a compact disc is INR 15 and the price of a tape is INR 10. To maximize her utility, Reeta shoulda)increase her consumption of compact discsb)Increase her consumption of tapesc)not change her consumption of compact discs and tapesd)lower the price of a tapeCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Reeta buys only compact discs and tapes and spends all her income. The marginal utility from a compact disc is 30 and the marginal utility from a tape is 20. The price of a compact disc is INR 15 and the price of a tape is INR 10. To maximize her utility, Reeta shoulda)increase her consumption of compact discsb)Increase her consumption of tapesc)not change her consumption of compact discs and tapesd)lower the price of a tapeCorrect answer is option 'C'. Can you explain this answer?.
Reeta buys only compact discs and tapes and spends all her income. The marginal utility from a compact disc is 30 and the marginal utility from a tape is 20. The price of a compact disc is INR 15 and the price of a tape is INR 10. To maximize her utility, Reeta shoulda)increase her consumption of compact discsb)Increase her consumption of tapesc)not change her consumption of compact discs and tapesd)lower the price of a tapeCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Reeta buys only compact discs and tapes and spends all her income. The marginal utility from a compact disc is 30 and the marginal utility from a tape is 20. The price of a compact disc is INR 15 and the price of a tape is INR 10. To maximize her utility, Reeta shoulda)increase her consumption of compact discsb)Increase her consumption of tapesc)not change her consumption of compact discs and tapesd)lower the price of a tapeCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Reeta buys only compact discs and tapes and spends all her income. The marginal utility from a compact disc is 30 and the marginal utility from a tape is 20. The price of a compact disc is INR 15 and the price of a tape is INR 10. To maximize her utility, Reeta shoulda)increase her consumption of compact discsb)Increase her consumption of tapesc)not change her consumption of compact discs and tapesd)lower the price of a tapeCorrect answer is option 'C'. Can you explain this answer?.
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Reeta buys only compact discs and tapes and spends all her income. The marginal utility from a compact disc is 30 and the marginal utility from a tape is 20. The price of a compact disc is INR 15 and the price of a tape is INR 10. To maximize her utility, Reeta shoulda)increase her consumption of compact discsb)Increase her consumption of tapesc)not change her consumption of compact discs and tapesd)lower the price of a tapeCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Reeta buys only compact discs and tapes and spends all her income. The marginal utility from a compact disc is 30 and the marginal utility from a tape is 20. The price of a compact disc is INR 15 and the price of a tape is INR 10. To maximize her utility, Reeta shoulda)increase her consumption of compact discsb)Increase her consumption of tapesc)not change her consumption of compact discs and tapesd)lower the price of a tapeCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of Reeta buys only compact discs and tapes and spends all her income. The marginal utility from a compact disc is 30 and the marginal utility from a tape is 20. The price of a compact disc is INR 15 and the price of a tape is INR 10. To maximize her utility, Reeta shoulda)increase her consumption of compact discsb)Increase her consumption of tapesc)not change her consumption of compact discs and tapesd)lower the price of a tapeCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Reeta buys only compact discs and tapes and spends all her income. The marginal utility from a compact disc is 30 and the marginal utility from a tape is 20. The price of a compact disc is INR 15 and the price of a tape is INR 10. To maximize her utility, Reeta shoulda)increase her consumption of compact discsb)Increase her consumption of tapesc)not change her consumption of compact discs and tapesd)lower the price of a tapeCorrect answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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