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Alora buys only two brands of golf balls: “Nickless” and “Olin 1.” The more of any...

Alora buys only two brands of golf balls: “Nickless” and “Olin 1.” The more of any one she buys, the lower the marginal utility of that ball. In spending all her income, her marginal utility of a “Nickless” is 5 and her marginal utility of an “Olin 1” is 10. The price of a “Nickless” ball is $2 and the price of an “Olin 1” is $3. Given this information, which of the statements is true?

Alora could increase her satisfaction by trading “Nickless” for “Olin 1.”

Alora would be willing to give up two “Olin 1” balls for one “Nickless” ball.

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Answer #1

As per the given statement, Alora could increase her satisfaction by trading “Nickless” for “Olin 1” statement is correctly opted to sync the information and it is true.

Explanation: In the given information, they stated that she buys the lower marginal utility of that ball. So, the Alora lower marginal utility of ball “Nickless” 5 rather than her higher marginal utility “Olin 1” is 10. Alora could have a chance to increase her utility on “Nickless” so she will get satisfaction to replace the “Olin 1” In the given two statements the Alora could increase her satisfaction by trading “Nickless” for “Olin 1.” The second statement is Alora would be willing to give up two “Olin 1” balls for one “Nickless” ball statement is not opted according to given information so it is not a true statement.

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