Question
Paul consumes only books and DVDs. At his current consumption bundle, his marginal utility from DVDs is and from books is . Each DVD costs
Paul consumes only books and DVDs. At his current consumption bundle, his marginal utility from DVDs is and from books is . Each DVD costs $11, and each book costs $1. Is he maximizing his utility? Explain. Part 2 Let be the marginal utility of books, be the marginal utility from DVDs, be the price of books, be the price of DVDs, and MRS be the marginal rate of substitution. Part 3 Paul is Part 4 A. maximizing his utility because MRS . B. not maximizing his utility because MRS . C. maximizing his utility because . D. maximizing his utility because . E. not maximizing his utility because .
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