Alex lives in Philadelphia and loves to eat desserts. He spends his entire weekly allowance on jello and pie. A bowl of jello is priced at $1.25, and a piece of apple pie is priced at $3.75. At his current consumption point, Alex's marginal rate of substitution (MRS) of jello for pie is 2. This means that Alex is willing to trade two bowls of jello per week for one piece of pie per week. Required:
a. Does Alex's current bundle maximize his utilityâin other words, make him as well off as possible? If not, how should he change it to maximize his utility?
b. Alex could increase his utility by buying more pudding and less pie per week.
c. Alex's current bundle maximizes his utility, and he should keep it unchanged.
d. Alex could increase his utility by buying less pudding and more pie per week.