📚 Learning Guide
Utility Maximization After Price Change
easy

If the price of oranges increases, how should a consumer adjust their consumption to maximize utility?

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

Buy more oranges and fewer apples

B

Maintain the same quantity of oranges and apples

C

Buy fewer oranges and more apples

D

Stop buying both fruits entirely

Understanding the Answer

Let's break down why this is correct

Answer

When the price of oranges increases, a consumer should think about how to get the most satisfaction or utility from their money. Since oranges are now more expensive, it might be a good idea to buy fewer oranges or look for other fruits that are cheaper but still tasty. For example, if a consumer used to buy five oranges but now finds them too pricey, they could buy three oranges and add some apples to their shopping list instead. This way, they can still enjoy fruit without spending too much. Ultimately, the goal is to balance their spending so they still feel happy with what they buy.

Detailed Explanation

When oranges cost more, people should buy fewer oranges. Other options are incorrect because Some might think buying more oranges is good, but higher prices mean less value; Keeping the same amount of both fruits ignores the price change.

Key Concepts

Utility Maximization
Price Elasticity of Demand
Marginal Utility
Topic

Utility Maximization After Price Change

Difficulty

easy level question

Cognitive Level

understand

Ready to Master More Topics?

Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.