Tori Devotes All of Her Income to the Consumption of Peanut

question 62

Multiple Choice

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 5 and the marginal utility of a jar of jelly is 7.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.

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Definitions:

Savings And Loan

Financial institutions that primarily accept savings accounts and provide mortgage lending, historically focusing on residential mortgages.

Taxpayers

Individuals or entities that are obliged to pay taxes to a government authority based on their income, property, or consumption.

Speculative Demand

The demand for goods not for immediate consumption, but for investment purposes with the hope of future price appreciation.

Commercial Banks

Financial institutions that accept deposits, offer various loans, and provide other financial services, like wealth management and currency exchange.