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Justin devotes all of his income to the consumption of apples and bananas. At his current level of consumption, the marginal utility of an apple
Justin devotes all of his income to the consumption of apples and bananas. At his current level of consumption, the marginal utility of an apple is 10 and the marginal utility of a banana is 5. Assume that diminishing marginal utility applies to both apples and bananas. Suppose the price of an apple is $0.20 and the price of a banana is $0.25. To maximize his total utility, assuming that the goods are divisible, he would:
a) consume more apples and fewer bananas.
b) consume less of both goods
c) consume more bananas and fewer apples.
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