Day: June 11, 2022

Lucy is a utility-maximising consumer that spends her disposable income on food and clothing.

When her weekly income is £80 she buys 5 units of food at a unit price of £10.

Her marginal utility from food consumption is 10 utility units.

If the price of a clothing unit is £1, the consumer’s marginal utility from clothing is?

Select ONE answer:

1. equal to that derived from food.
2. 1/10 utility unit.
3. 1 utility unit.
4. 10 utility units.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.