Tori devotes all of her income to the consumption of peanut butter and jelly.She has just discovered that at her current level of consumption the marginal utility of a jar of peanut butter is five and the marginal utility of a jar of jelly is seven.Which statement is TRUE?
A) To maximize her total utility,Tori should consume more of both goods.
B) To maximize her total utility,Tori should consume less of both goods.
C) To maximize her total utility,Tori should consume more peanut butter and less jelly.
D) There is not enough information provided to justify a change in Tori's level of consumption.

Question

Quizplus · Accepted Answer

To determine if Tori should change her consumption, we need to know the prices of peanut butter and jelly to compare the marginal utility per dollar spent on each. Without this information, we cannot decide the optimal consumption.

Tori Devotes All of Her Income to the Consumption of Peanut