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Tyrell Has $50 to Spend on Good a and Good

Question 183

Multiple Choice

Tyrell has $50 to spend on Good A and Good B per week.The price of Good A is $5 and that of Good B is $4.He buys six units of Good A and five units of Good B.The marginal utility of the sixth unit of Good A is 25 units,and the marginal utility of the fifth unit of Good B is 20 units.Which of the following is true?


A) He is maximizing his utility.
B) His last dollar spent on Good A exceeds the last dollar spent on Good B.
C) He is not maximizing his utility and should buy more of Good A.
D) He is not maximizing his utility and should buy more of Good B.
E) He is not maximizing his utility because he is not spending all of his income.

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