4 Balancing utility and price Suppose Lucia has to choose between purchasing high definition televisions and milk Which of the

Question

4 Balancing utility and price Suppose Lucia has to choose between purchasing high definition televisions and milk Which of the following is the utility maximizing rule that Lucia should follow while choosing the optimal quantities of these two goods Note In the answer options that follow MU stands for marginal utility MU of Milk MU of HDTV Price of HDTV Price of Milk MU of Milk x Price of Milk MU of HDTVs x Price of HDTVs MU of Milk MU of HDTVs Price of Milk Price of HDTV O MU of Milk MU of HDTVs less greater Since milk costs little and high definition televisions are expensive it must follow that when people choos definition televisions to purchase the marginal utility they receive from the last gallon of milk they buy is greater receive from the last high definition television they buy mal quantities of milk and high than the marginal utility they

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