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4. Finding the optimal combination of two goods Raphael enjoys consuming both milk and juice. Each glass of milk costs PM=$1 , and each glass
4. Finding the optimal combination of two goods Raphael enjoys consuming both milk and juice. Each glass of milk costs PM=$1 , and each glass of juice costs PJ=$2 . Suppose that Raphael buys 30 glasses of milk and 20 glasses of juice per week. The following graphs show his marginal utility curves for milk and juice. At his current consumption level, Raphael's marginal utility from consuming the last glass of milk he bought is MUM=12 utils per glass, and his marginal utility from consuming the last glass of juice he bought is MUJ=12 utils per glass. 0 10 20 30 40 50 60 24 20 16 12 8 4 0 MU OF MILK (Utils per glass) MILK (Glasses) 0 10 20 30 40 50 60 24 20 16 12 8 4 0 MU OF JUICE (Utils per glass) JUICE (Glasses) Is Raphael currently maximizing his utility? No; he could buy more milk and less juice, not spend any more money, and be better off. No; he likes juice and milk more than other goods, so he should buy more of both. No; he could buy less milk and more juice, not spend any more money, and be better off
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