Bob lives in San Diego and loves to eat desserts. He spends his entire weekly allowance on pudding and pie. A bowl of pudding is priced at $1.00, and a piece of apple pie is priced at $4.00. At his current consumption point, Bob's marginal rate of substitution (MRS) of pudding for pie is 4. This means that Bob is willing to trade four bowls of pudding per week for one piece of pie per week. Does Bob's current bundle maximize his utility—in other words, make him as well off as possible? If not, how should he change it to maximize his utility? Bob could increase his utility by buying more pudding and less pie per week.   Bob's current bundle maximizes his utility, and he should keep it unchanged.   Bob could increase his utility by buying less pudding and more pie per week.

Sienna gets a total of 20 utils per week from her consumption of pizza and a total of 40 utils per week from her consumption of yogurt. The price of pizza is $1 per slice, the price of yogurt is $1 per cup, and she consumes 10 slices of pizza and 20 cups of yogurt each week. Which of the following statements is correct regarding Sienna's current consumption of pizza and yogurt? Sienna should eat more yogurt and less pizza, as she is getting more utils from the $20 spent on yogurt than from the $10 spent on pizza. Sienna should eat more pizza and less yogurt, as she is getting more utils from her last dollar spent on pizza than her last dollar spent on yogurt. We cannot determine if Sienna is maximizing her total utility with the information provided. Sienna should eat more yogurt and less pizza, as she is getting more utils from her last dollar spent on yogurt than her last dollar spent on pizza.

Madison has set aside $24 for her snack budget this month. Her favorite snacks are ice cream and chips. The price of a pint of ice cream is $4 and the price of a bag of chips is $3. She currently consumes three pints of ice cream and four bags of chips each month. If the price of a pint of ice cream drops to $3, the income effect predicts that Madison will consume: more ice cream and more chips. equal amounts of ice cream and chips. more ice cream and fewer chips. less ice cream and more chips.

Gabriel has a weekly income (N) of $50, which he uses to purchase cupcakes (C) and tea (7). The price of a cupcake is $1, and the price of tea is $2.50. Suppose Gabriel's income increases to $100, and the prices of both cupcakes and tea remain unchanged. Given this income change, one would expect Gabriel's budget line to: O shift to the right. shift to the left. rotate around the tea axis point. not be affected.