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Emilia is trying to figure out what combination of bags of peanuts and bags of popcorn she should buy with her
budget. The price of peanuts is currently per bag and the price of popcorn is currently per bag. Emilia is
currently deciding whether to purchase one more bag of peanuts or one more bag of popcorn. She should choose
the - A) peanuts every time.
O B) popcorn every time.
O C) peanuts, if the marginal utility of peanuts is greater than popcorn.
O D) popcorn, if the marginal utility of popcorn is greater than peanuts.

Ask by Schneider Whittaker. in the United States
Mar 30,2025

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The correct choice is C) peanuts, if the marginal utility of peanuts is greater than popcorn, or D) popcorn, if the marginal utility of popcorn is greater than peanuts. The decision should be based on the comparison of marginal utilities.

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Bonus Knowledge

Emilia should consider her marginal utility when choosing between the two snacks. Marginal utility is the additional satisfaction or benefit she gains from consuming one more unit of a product. If she derives greater satisfaction from an additional bag of peanuts than from popcorn, then option C becomes the best choice—it’s all about maximizing her enjoyment within her budget.
In the real world, this concept is applied in various decision-making scenarios. For example, think about how consumers choose between different brands or types of products. By assessing how much more they enjoy one brand over another, customers can make smarter purchasing decisions that align with their preferences and maximize their overall pleasure while still staying within their budget constraints.

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