Suppose that at Miles's current level of consumption, his marginal utility from a pizza is 10...
Suppose that at Miles's current level of consumption, his marginal utility from a pizza is 10 utils, and his marginal utility from a pint of ice cream is 16 utils. If the price of a pizza is $8, and the price of a pint of ice cream is $5, is Miles maximizing his utility?
a. Yes. He should not change his spending on frozen pizza and ice cream.
b. No. He should shift his spending away from ice cream and towards frozen pizza.
c. No. He should buy less frozen pizza and less ice cream.
d. No. He should shift his spending away from frozen pizza and towards ice cream.
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