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9. MR5 and utility maximization Paolo lives in Chicago and loves to eat desserts. He spends his entire weekly allowance on pudding and pie. A
9. MR5 and utility maximization Paolo lives in Chicago and loves to eat desserts. He spends his entire weekly allowance on pudding and pie. A bowl of pudding is priced at $1.00. and a piece of pecan pie is priced at $3.00. At his current consumpb'on point, Paolo's marginal rate of substitub'on (MRS) of pudding for pie is 4. This means that Paolo is willing to trade Four bowls of pudding per week for one piece of pie per week. Does Paolo's current bundle maximize his utilityin other words, make him as well off as possible? If not, howI should he change it to maximize his Utility? 0 Paolo could increase his utility by buying less pudding and more pie per week. 0 Paolo's current bundle maximizes his utility, and he should keep it unchanged. 0 Paolo could increase his utility by buying more pudding and less pie per week
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