At George's current level of consumption,MUskᵢ tᵣᵢps/Pskᵢ tᵣᵢps = 7 and
MUᵣₑstₐᵤᵣₐnt mₑₐls/Pᵣₑstₐᵤᵣₐnt mₑₐls = 9.George can increase his utility by decreasing his consumption of ski trips and increasing his consumption of restaurant meals.

Question

Quizplus · Accepted Answer

Since MUᵣₑstₐᵤᵣₐnt mₑₐls/Pᵣₑstₐᵤᵣₐnt mₑₐls > MUskᵢ tᵣᵢps/Pskᵢ tᵣᵢps, George can increase his overall utility by reducing his consumption of ski trips and increasing his consumption of restaurant meals. This will allow him to allocate his resources more efficiently, as the marginal utility per dollar spent on restaurant meals is higher.

At George's Current Level of Consumption,MUskᵢ Tᵣᵢps/Pskᵢ Tᵣᵢps = 7