Colin Spends His Income of $100 Per Week on Two

question 50

Essay

Colin spends his income of $100 per week on two goods: pizzas (which cost $8 each) and milk (which costs $1 per gallon). At his current level of consumption, the marginal utility from the last pizza consumed is 32 and the marginal utility from the last gallon of milk is 4. Is Colin maximizing his utility? Why or why not? If not, what should Colin do to achieve a higher level of utility?

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Definitions:

Peripheral Arguments

Arguments that persuade by appealing to emotions or superficial associations rather than logic or reason.

Persuasion

The act or process of convincing someone to do or believe something through reasoning or the use of emotional appeal.

Attitudes

A psychological tendency expressed by evaluating a particular entity with some degree of favor or disfavor.

Beliefs

Cognitive convictions or acceptances that something is true or exists, often influencing behavior and perception.