Let MU Equal Marginal Utility and P Equal Price

question 225

Multiple Choice

Let MU equal marginal utility and P equal price. If the MU of lattes per dollar spent on a latte is less than the MU of iced tea per dollar spent on an iced tea, the consumer

• A) is maximizing utility.
• B) should spend more on iced tea and less on lattes.
• C) should spend more on lattes and less on iced tea.
• D) is maximizing marginal utility.