Question

Suppose Lorenzo has to choose between purchasing smart TVs and sweet tea. Which of the following is the utility-maximizing rule that Lorenzo 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 Sweet teaPrice of Sweet tea=MU of Smart TVsPrice of Smart TVs MU of Sweet tea=MU of Smart TVs (MU of Sweet tea)×(Price of Sweet tea)=(MU of Smart TVs)×(Price of Smart TVs) MU of Sweet teaPrice of Smart TVs=MU of Smart TVsPrice of Sweet tea Since sweet tea is inexpensive and smart TVs are expensive, it must follow that when people choose their optimal quantities of sweet tea and smart TVs to purchase, the marginal utility they receive from the last gallon of sweet tea they buy is than the marginal utility they receive from the last smart TV they buy.

          Suppose Lorenzo has to choose between purchasing smart TVs and sweet tea.
Which of the following is the utility-maximizing rule that Lorenzo 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 Sweet teaPrice of Sweet tea=MU of Smart TVsPrice of Smart TVs
MU of Sweet tea=MU of Smart TVs
(MU of Sweet tea)×(Price of Sweet tea)=(MU of Smart TVs)×(Price of Smart TVs)
MU of Sweet teaPrice of Smart TVs=MU of Smart TVsPrice of Sweet tea
Since sweet tea is inexpensive and smart TVs are expensive, it must follow that when people choose their optimal quantities of sweet tea and smart TVs to purchase, the marginal utility they receive from the last gallon of sweet tea they buy is    than the marginal utility they receive from the last smart TV they buy.

Added by Vicente B.

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