At Revolution Doughnuts in Fort Collins, Colorado, a cup of coffee or a doughnut is $1. Suppose Hannah loves going to Revolution Doughnuts. Currently, her marginal utility per dollar from doughnuts is 14 and her marginal utility per dollar from coffee is 10. Is Hannah maximizing her total utility?
A) No, she needs to buy more doughnuts and less coffee.
B) No, she needs to buy more coffee and fewer doughnuts.
C) Yes, she is maximizing utility.
D) No, she needs to buy fewer doughnuts and less coffee.
Correct Answer:
Verified
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