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Jake enjoys consuming both guacamole and salsa. Each jar of guacamole costs PG=$1 , and each jar of salsa costs PS=$2 . Suppose that Jake
Jake enjoys consuming both guacamole and salsa. Each jar of guacamole costs PG=$1 , and each jar of salsa costs PS=$2 . Suppose that Jake buys 30 jars of guacamole and 20 jars of salsa per week. The following graphs show his marginal utility curves for guacamole and salsa. At his current consumption level, Jake's marginal utility from consuming the last jar of guacamole he bought is MUG=12 utils per jar, and his marginal utility from consuming the last jar of salsa he bought is MUS=12 utils per jar. 0 10 20 30 40 50 60 24 20 16 12 8 4 0 MU OF GUACAMOLE (Utils per jar) GUACAMOLE (Jars) 0 10 20 30 40 50 60 24 20 16 12 8 4 0 MU OF SALSA (Utils per jar) SALSA (Jars) Is Jake currently maximizing his utility? No; he likes salsa and guacamole more than other goods, so he should buy more of both. No; he could buy more guacamole and less salsa, not spend any more money, and be better off. Yes; the marginal utility he receives from his last jar of guacamole equals that of his last jar of salsa. No; he could buy less guacamole
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