Kevin Is Trying to Figure Out What Combination of Bags

question 53

Multiple Choice

Kevin is trying to figure out what combination of bags of peanuts and bags of popcorn he should buy with his $13 budget. The price of peanuts is currently $3 per bag and the price of popcorn is currently $2 per bag. Kevin is currently deciding whether to purchase one more bag of peanuts or one more bag of popcorn. He should choose the:

• A) peanuts every time.
• B) popcorn every time.
• C) peanuts if the marginal utility of peanuts is greater than popcorn.
• D) popcorn if the marginal utility of popcorn is greater than peanuts.
• E) peanuts if the last bag he consumed was popcorn, and vice versa.

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