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Economics - Financial Markets
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Cole is about to purchase 4 units of good A and 6 units of good B. The price of both A and B is $2. Cole has only $20 to spend. Assume that the marginal utility of the fourth unit of A is 12 and the marginal utility of the sixth unit of B is 8. If Cole wants to maximize utility subject to his budget constraints [A] he should buy more of A and less of B. [B] he should buy equal amounts of A and B since they both cost $2.00. [C] he should buy less of A and more of B. [D] he should not buy anything. [E] he should buy A and B in the quantities indicated.
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