Question

Javier spends all his income on peanuts and chewing gum. The last dollar spent on peanuts yeilds 14 utils and the last dollar spent on chewing gum yields 6 utils. To increase total​ utility, Javier should spend less on peanuts and more on chewing gum?

Answer 1

Answer:

False

Explanation:

Javier's utils per dollar of peanuts = 14 utils per $1 spent

Javier's utils per dollar of chewing gum = 6 utils per $1 spent

Since the utils per dollar that Javier obtains from consuming peanuts are higher than those from consuming chewing gum, if he wants to increase his total utility, he should purchase more peanuts.