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Question
John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $4. The price of Good B is $2. If John wants to maximize his utility he should
A) continue to purchase the same amount of Good A and Good B.
B) increase the consumption of Good A and decrease the consumption of Good B.
C) decrease the consumption of Good A and increase the consumption of Good B.
D) decrease the consumption of Good A and decrease the consumption of Good B
Answer
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