Multiple Choice
Suppose Hanna spends her entire budget buying bagels and cups of coffee each day. Also, suppose the marginal utility of her last bagel is 100 and the marginal utility of her last cup of coffee is 200. If the price of a bagel is $4 and the price of a cup of coffee is $2, then
A) Hanna needs to decrease her consumption of bagels to maximize her utility.
B) Hanna needs to increase her consumption of bagels to maximize her utility.
C) Hanna should buy half as many bagels as coffee in order to maximize her utility.
D) bagels must provide more total utility than coffee.
Correct Answer:
Verified
Correct Answer:
Verified
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