Suppose Paul has chosen a combination of two goods, A and B, such that the marginal utility per dollar spent for good A (MUA/PA) is .6 and the marginal utility per dollar spent for good B (MUB/PB) is 1. To increase utility with the same amount of money, Paul should:

A. increase the number of B consumed and decrease the number of A consumed.
B. increase the number of both A and B consumed.
C. increase the number of A consumed and decrease the number of B consumed.
D. do nothing; he cannot increase total utility.


Answer: A

Economics

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