Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman

Exercise 13

[Uses the Marginal Utility Approach] Now go back to the original assumptions of problem 1 (novels cost $8,hamburgers cost $6,and income is $120). Suppose that Parvez is spending $120 monthly on paperback novels and hamburgers. For novels,MU/P = 5; for hamburgers,MU/P = 4. Is he maximizing his utility? If not,should he consume (1)more novels and fewer hamburgers; or (2)more hamburgers and fewer novels? Explain briefly.