Jill,a careful utility maximizer,consumes peanut butter and ice cream.Assume that both peanut butter and ice cream are normal goods.Right after she achieves the utility-maximizing level of consumption of the two goods,the price of peanut butter increases.After she adjusts to this event,the marginal utility of peanut butter goes _____ and that of ice cream goes _____.
A)up;up
B)down;down
C)down;up
D)up;down

Question

Quizplus · Accepted Answer

When the price of peanut butter increases, Jill will consume less of it to maximize utility, causing its marginal utility to increase. Conversely, she will consume more ice cream, causing its marginal utility to decrease.

Jill,a Careful Utility Maximizer,consumes Peanut Butter and Ice Cream