Rebecca is trying to allocate her income between foie gras and truffles to maximize her utility. The price of an ounce of foie gras is $25 and the price of an ounce of truffles is $50. After Rebecca spends her money, the marginal utility of the last ounce of foie gras is 400 and the marginal utility of the last ounce of truffles is 500. Rebecca has not allocated her income optimally. Why? How can Rebecca change her allocation to increase her utility?
