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Mr. Max is about to purchase 4 units of good A and 6 units of good B. The price of both A and B is $2. Mr. Max has only $20 to spend. If the marginal utility of the fourth unit of A is 12 and the marginal utility of the sixth unit of B is 12, then:
a. he should not buy anything.
b. he should buy more of A and less of B.
c. he should buy less of A and more of B.
d. he should buy A and B in the quantities indicated.
e. he should buy more of A and little more than that of B.

Respuesta :

The marginal utility of the sixth unit of B is 12, then He should buy A and B in the quantities indicated.

The application of the rule of marginal utility in real-world situations:

When you receive more of something you desire, such an item or service, you feel an additional sense of satisfaction known as marginal utility.

In reality, marginal utility holds true for the majority of human needs and desires. Marginal utility is the additional satisfaction you experience from purchasing more pizza, for example, if you go to buy some and discover that you can afford more than you anticipated.

The issue with marginal utility, though, is that if you continue to receive more of anything, you will reach a point when you no longer feel as satisfied as you did while receiving additional.

For instance, if you keep ordering more pizza on the same day, ultimately you will feel as though you have had enough and you won't want any more pizza. The Law of Diminishing Marginal Utilities is what's responsible for this situation.

Learn more about Marginal Utility:

brainly.com/question/15050855

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