Sally Garcia Devotes All of Her Income to the Consumption

question 1

Essay

Sally Garcia devotes all of her income to the consumption of two goods, apples and Reese's Peanut Butter Cups.She has just discovered that at her current level of consumption the marginal utility of an apple is 6 and the marginal utility of a Reese's Peanut Butter Cup is 8.Suppose the price of an apple is $0.20 and the price of a Reese's Peanut Butter Cup is $0.25.To maximize her total utility, assuming that the goods are divisible, she would:
A.consume more Reese's Peanut Butter Cups and fewer apples.
B.consume less of both goods.
C.consume more apples and fewer Reese's Peanut Butter Cups.
D.There is not enough information to justify a change in her current level of consumption.

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Definitions:

Master Status

Some characteristic of a person that overrides all other features of the person’s identity.

Having a Disability

refers to the condition of having physical, mental, or emotional impairments that substantially limit one or more major life activities.

Postindustrial Societies

Societies characterized by an economy where the service sector produces more wealth than the industrial sector, reflecting a shift away from manufacturing-based economies.

Information Based

Pertaining to systems or processes that primarily depend on the processing, storage, and dissemination of data and information.