Question

Todd is a cattle rancher. In June and July he spent his clothing budget on jeans and cowboy hats. Each pair of jeans cost $50 and each hat cost $100. At Todd’s optimal choice, his marginal utility from the last pair of jeans purchased is 200. This means that his marginal utility from the last cowboy hat purchased is: 550 500 450 400 NEXT

Answer 1

Answer:

The correct answer to the following question is option D) 400.

Explanation

Marginal utility can be described as the additional utility that a person gets by consuming one additional unit of product. From the given above question , we know that for Todd each pair of jeans cost $50 and the marginal utility that he gets from the last pair of jeans is 200, so if we know that each cowboy hat cost $100, then the marginal utility from the last cowboy hat would be 100 x 4 = 400 .