(Solved): 7. MRS and utility maximization Suppose your classmate Clancy loves to eat dessert-so much so that ...

7. MRS and utility maximization Suppose your classmate Clancy loves to eat dessert-so much so that he allocates his entire weekly budget to peach cobbler and pie. The price of one bowl of peach cobbler is \( \$ 1.75 \), and the price of a plece of coconut creme pie is \( \$ 5.25 \). At his current level of consumption, Clancy/s marginal rate of substitution (Mas) of pesch cobbler for pie is 4. In other words, Clancy is willing to sacrifice four bowis of peach cobbler for one piece of pie per week. Does Clancy's current consumption bundle maximize his utility? That is, does it make him os well off as possible? If not, how should he change it to maximize his utility? Cancy could increase his utaly by buying less peach cobbler and more ple per week. Clancy's current bundle maximizes his vtilty, and he should keep it unchanged. Clancy could increase his utility by buying more peach cobbler and less pie per week.