Joe's marginal utility from cake is 200 and his marginal utility from cookies is 100. Joe has a limited budget and spends all of it on these two goods. If the price of a cake is $5 and the price of a package of cookies is $5, what should Joe do to achieve consumer equilibrium?
A) Purchase only cookies.
B) Purchase an equal number of cakes and cookies.
C) Purchase more cakes and fewer cookies.
D) Purchase more cookies and fewer cakes.
Correct Answer:
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