When Marietta chooses to only purchase a combination of goods that lie within her budget line, she: is maximizing utility. is decreasing utility. must reduce the quantity. likely has negative savings

Question

When Marietta chooses to only purchase a combination of goods that lie within her budget line, she: is maximizing utility. is decreasing utility. must reduce the quantity. likely has negative savings

Answer 1

When Marietta chooses to only purchase a combination of goods that lie within her budget line, she is maximizing utility.The budget line represents all the combinations of two goods that she can purchase given her income and the prices of the goods. By choosing a combination on this line, she is efficiently using her entire budget to maximize her satisfaction or utility from the goods she purchases. This does not necessarily mean she has negative savings; it simply means she is spending her available budget optimally.

Problemas

When Marietta chooses to only purchase a combination of goods that lie within her budget line, she: is maximizing utility. is decreasing utility. must reduce the quantity. likely has negative savings

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