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7. MRS and utility maximization Suppose your classmate Carlos loves to eat dessert-so much so that he allocates his entire weekly budget to chocolate mousse

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7. MRS and utility maximization Suppose your classmate Carlos loves to eat dessert-so much so that he allocates his entire weekly budget to chocolate mousse and pie. The price of one bowl of chocolate mousse is $1.25, and the price of a piece of coconut creme pie is $3.75. At his current level of consumption, Carlos's marginal rate of substitution (MRS) of chocolate mousse for pie is 3. In other words, Carlos is willing to sacrifice three bowls of chocolate mousse for one piece of pie per week. Does Carlos's current consumption bundle maximize his utility? That is, does it make him as well off as possible? If not, how should he change it to maximize his utility? O Carlos's current bundle maximizes his utility, and he should keep it unchanged. O Carlos could increase his utility by buying less chocolate mousse and more pie per week. Carlos could increase his utility by buying more chocolate mousse and less pie per week

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