Mattie consumes milk and cookies. Assume Mattie has a strictly diminishing marginal rate of substitution over these two goods. Suppose Mattie is currently spending all of her available income on a bundle of milk and cookies. At her current bundle of milk and cookies, Mattie's marginal utility from consuming an additional glass of milk is 2 utils and her marginal utility from consuming an additional cookie is 6 utils. If the price of a cookie is $3 and the price of a glass of milk is $1, which one of the following statements must be true? (Select A, B, C, or D) A. Mattie should consume more milk and fewer cookies B. Mattie should consume more cookies and less milk C. Mattie's current bundle of milk and cookies maximizes her utility D. There is not enough information to know whether Mattie should consume more milk or more cookies
Mattie consumes milk and cookies. Assume Mattie has a strictly diminishing marginal rate of substitution over these two goods. Suppose Mattie is currently spending all of her available income on a bundle of milk and cookies. At her current bundle of milk and cookies, Mattie's marginal utility from consuming an additional glass of milk is 2 utils and her marginal utility from consuming an additional cookie is 6 utils. If the price of a cookie is $3 and the price of a glass of milk is $1, which one of the following statements must be true? (Select A, B, C, or D) A. Mattie should consume more milk and fewer cookies B. Mattie should consume more cookies and less milk C. Mattie's current bundle of milk and cookies maximizes her utility D. There is not enough information to know whether Mattie should consume more milk or more cookies
Chapter21: Demand: Consumer Choic
Section: Chapter Questions
Problem 1E
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