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Teresa has a $10 snack budget that she uses to buy chips and granola. Assume the price of chips (Pc ) is fixed at $2.

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Teresa has a $10 snack budget that she uses to buy chips and granola. Assume the price of chips (Pc ) is fixed at $2. Table A shows Teresa's marginal utility (MU ) and marginal utility per dollar (MFQ) she receives from the first through fifth bags of chips she buys each week. Table B shows the same information for granola when the price of a bag of granola (Pg) is either $4 or $2. Assume that Teresa is a rational consumer who wants to maximize her utility. Table A Chips MU Mu/P (Bags) _(Utils) _(If P=$2) 0 = = 1 30 15 2 24 12 3 20 10 4 14 7 5 6 3 Table B Granola MU Mu/P (Bags) _ (Utils) (If P=$4) (If P=$2) 0 -

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