Tyrell Has $50 Per Week to Spend on Good A

question 132

Multiple Choice

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

• A) He is maximizing his utility.
• B) We cannot tell if he is maximizing his utility unless we know his total utility.
• C) He is not maximizing his utility and should buy more of A.
• D) He is not maximizing his utility and should buy more of B.
• E) He is not maximizing his utility because he is not spending all of his income.

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