A consumer makes purchases of an existing product X such that the marginal utility is 10 and the price is $5. The consumer also tries a new product Y and at the current level of consumption it has a marginal utility of 8 and a price of $1. The utility-maximizing rule suggests that this consumer should ?

Increase the consumption of product Y and decrease the consumption of product X.

Explanation:

Utility-maximizing rule states that a consumer is maximizing its utility at a point where the marginal utility per dollar spent equal for both the products.

Marginal utility per dollar for Product X:

= 2 utils per dollar

Marginal utility per dollar for Product Y:

= 8 utils per dollar

Here, the utility-maximizing rule suggests that this consumer should consume more of product Y and less of product X.

answer; buying the bill at a discount from the face value to be received at maturity;

answer(d) encourage cooperation by improving the chances of mutually agreeable transactions;