At a consumer optimum involving goods A and B, the marginal utility of good A is five times the marginal utility of good B.
Part 2
The price of good B is $2.50
.
The price of good A is
Part 3
A.
$12.50
.
B.
$5
.00.
C.
$10.00
.
D.
There is not enough information.
There is not enough information given to determine the price of good A.
Part 1: Since the marginal utility of good A is five times the marginal utility of good B, we can represent this as MU(A) = 5 * MU(B).
Part 2: The price of good B is $2.50.
Part 3: To find the price of good A, we need more information. Specifically, we need to know the consumer's budget or the quantity of goods A and B being consumed.
Without this information, we cannot determine the price of good A. Therefore, the answer is D. There is not enough information.
To determine the consumer optimum involving goods A and B, one needs to consider the relationship between marginal utility and price.
Part 1: The given information states that the marginal utility of good A is five times the marginal utility of good B. This means that for every unit of good A consumed, it provides five times more satisfaction (marginal utility) compared to a unit of good B.
Part 2: The price of good B is given as $2.50. This means that each unit of good B costs $2.50.
Part 3: Unfortunately, the price of good A is missing in the information provided. The consumer optimum involves finding the combination of goods A and B that maximizes consumer satisfaction within the given budget constraint. Without knowing the price of good A, it is impossible to calculate the optimum consumption and determine the answer options.
Therefore, the correct answer is D. There is not enough information to determine the price of good A, and hence, the consumer optimum involving goods A and B cannot be determined.