The marginal utility per dollar that Harold Stratton receives from oranges is greater than the marginal utility per dollar Harold receives from pears.To maximise his utility, Harold should

Question

Quizplus · Accepted Answer

Since the marginal utility per dollar from oranges is greater than from pears, Harold should allocate more of his budget towards buying oranges and less towards buying pears. This will result in him achieving a higher level of utility overall. Option A is not necessarily the best choice, as it assumes that Harold's income is the limiting factor, which may not be the case. Option B is not a good choice, as reducing consumption of both oranges and pears will not necessarily lead to higher overall utility. Option D is the opposite of the recommended strategy.

The Marginal Utility Per Dollar That Harold Stratton Receives from Oranges