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:

Behaviorism

A theory in psychology that emphasizes the importance of observable actions and behaviors over internal processes.

Experimental Method

is a research methodology where the researcher manipulates one variable and controls/randomizes the rest of the variables to study cause-and-effect relationships.

Cognitive Psychologist

A professional who studies mental processes including how people think, perceive, remember, and learn, often focusing on areas such as problem-solving, decision-making, and memory.