Janet is currently purchasing five donuts and six crepes per week. Her marginal utility from the fifth donut is 72, and her marginal utility from the fifth crepe is 40. If donuts cost $8 and crepes cost $5, what should she do assuming that she still has some of her budget to spend?
A) buy more crepes
B) buy more donuts
C) buy less of both goods
D) nothing because she is maximizing her utility

Question

Quizplus · Accepted Answer

Janet should buy more donuts because the marginal utility per dollar spent on donuts (72/8 = 9) is higher than that on crepes (40/5 = 8), indicating she gets more utility per dollar from donuts.

Janet Is Currently Purchasing Five Donuts and Six Crepes Per