Bobby consumes only ice cream and cookies and he is spending all of his income. Currently, he is spending his income in such a way that his marginal utility of ice cream is 100 units of utility and his marginal utility of cookies is 150 units of utility. The price of ice cream is $1.00 per scoop and the price of a cookie is $2.00. To maximize his utility, Bobby should .(A) buy no ice cream.(B) not change his purchases of ice cream and cookies.(C) buy more ice cream and fewer cookies.(D) buy more cookies and less ice cream.

(D) buy more ice cream and fewer cookies

Explanation: When a consumer spends all of his income and consumes a bundle of goods such that the marginal utility per dollar from all goods is equal, then the consumer's total utility is maximized. Buying more of ice-cream gives the only combination that gives him the same marginal utility per dollar Bobby spends on cookies as on ice cream.

Marginal utility estimates the added satisfaction a consumer gets from consuming additional units of goods or services. It is used to determine how much of a product consumers are willing to purchase.

answer; risk transference;