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1.2 Individual economic decision making (A-level only)

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Question 15

Chloe allocates her weekly entertainment budget between streaming subscriptions (SSS) and cinema tickets (CCC). The price of a streaming subscription is PS=£10P_S = £10PS​=£10 and the price of a cinema ticket is PC=£12P_C = £12PC​=£12. Currently, Chloe is consuming a combination of these goods such that her marginal utility from streaming is MUS=50MU_S = 50MUS​=50 utils and her marginal utility from cinema tickets is MUC=72MU_C = 72MUC​=72 utils. According to traditional economic theory, to maximise her total utility from her fixed budget, Chloe should:

A

increase her consumption of streaming subscriptions and decrease her consumption of cinema tickets.

B

increase her consumption of cinema tickets and decrease her consumption of streaming subscriptions.

C

maintain her current consumption of both goods as her total utility is already maximised.

D

decrease her consumption of both goods to minimise her total expenditure.

Markscheme

1.2 Individual economic decision making (A-level only) Questions

  1. A Level
  2. /Economics
  3. /1.2 Individual economic decision making (A-level only)

45 exam-style questions on AQA A Level Economics 1.2 Individual economic decision making (A-level only), covering 1.2.1 Consumer behaviour, 1.2.2 Imperfect information, 1.2.3 Aspects of behavioural economic theory, and 1.2.4 Behavioural economics and economic policy. Each one has a worked solution and a mark scheme showing where the marks go.

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