Ms. Birnbaum is buying bottles of beer and bags of pretzels. The marginal utility of the last bottle of beer is 60 and the marginal utility of the last bag of pretzels is 30. The price of beer is $0.30 per bottle and the price of pretzels is $0.20 per bag. Ms. Birnbaum
A. is not spending all her income.
B. should buy more pretzels and less beer.
C. is buying beer and pretzels in the utility-maximizing amounts.
D. should buy more beer and fewer pretzels.
Answer: D
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