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Business, 20.03.2020 23:49 bshreve

Mark consumes only cookies and books. At his current consumption bundle, his marginal utility from books is 6 and from cookies is 5. Each book costs $10.00 and each cookie costs $2.00. Is he maximizing his utility? Explain. If he is not, then how can he increase his utility while keeping his total expenditure constant? Mark is A. not maximizing utility because MRS equals negative StartFraction Upper U Subscript Upper B Over Upper U Subscript Upper C EndFraction less thannegative StartFraction p Subscript Upper B Over p Subscript Upper C EndFraction . B. maximizing utility because MRS equals negative StartFraction Upper U Subscript Upper B Over Upper U Subscript Upper C EndFraction . C. maximizing utility because MRS equals negative StartFraction Upper U Subscript Upper B Over Upper U Subscript Upper C EndFraction equalsnegative StartFraction p Subscript Upper B Over p Subscript Upper C EndFraction . D. not maximizing utility because StartFraction Upper U Subscript Upper B Over p Subscript Upper B EndFraction equalsStartFraction Upper U Subscript Upper C Over p Subscript Upper C EndFraction . E. not maximizing utility because MRS equals negative StartFraction Upper U Subscript Upper B Over Upper U Subscript Upper C EndFraction greater thannegative StartFraction p Subscript Upper B Over p Subscript Upper C EndFraction . Click to select your answer and then click Check Answer.

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