Hmm. Basic Economics Class Conundrum.?

Question

# Joshua consumes only apples and bread and is in consumer equilibrium. Joshua reads that eating bread is healthy, so his total utility from each loaf of bread increases. At his new consumer equilibrium Joshua would consume .

1. some combination of apples and bread corresponding to a lower ratio of the marginal utility of bread to the marginal utility of apples

2. fewer apples and more bread

3. the same quantity of apples and the same quantity of bread

4. more apples and less bread

I would assume it's more bread and less apples. But I don't understand the math. It makes sense for more bread, but I think math says the answer is more appl. why?

Marginal utility .

2. is an implication of the law of demand

4. is the additional utility derived from the last unit of a good consumed

2 is true for diminishing marginal utility and 4 is true, but MU is for all units, not just the last one. Hm, I over-think stuff, huh?

Answer 1

As  a former ace economics student and TA, I would suggest that you try to take the real world out of economics problems.

Remember that they are just models - they are overly simplified for a reason - life has a lot more stuff going on (I like bread but I am pick for example) than could ever be captured in a multiple choice question.

The question says - Joshua likes bread More than he did before, what will he do? That is it. Don't over think this stuff, you will go insane

So the answer is 2 -fewer apples and more bread.  he has only so much money and cannot buy more bread without buying fewer apples -

Is the second part a second question?

Anyway Marginal utility is number 4: "marginal" always means the next one. Marginal utility is a part of the whole laws of demand

I don't understand what you are asking in the last phrase

Answer 2

math never says more apple...

2 is true

4 & 1 r basically the same answer, so they r both false