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AP® Microeconomics

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Utility Maximization: Chocolate and Chips

APMICR-BHJSX4

Stephen uses all of his income to purchase two products: chocolate and potato chips. Based on the quantities that he is currently purchasing, the marginal utilities for chocolate and potato chips are 8 and 4 respectively.

Chocolate has a price of \$4 and potato chips have a price of \$1.

What should he do in order to maximize his total utility?

A

He should purchase more chocolate and fewer potato chips.

B

He should purchase less chocolate and more potato chips.

C

He should purchase more chocolate and more potato chips.

D

He should purchase less chocolate and fewer potato chips.

E

He should not change his purchases; he is already maximizing his utility.