Garcia is currently spending his entire lunch budget on 3 sodas and 4 hot dogs. At his current level of consumption, Garcia’s marginal utility for sodas is 5 utils and his marginal utility for hot dogs is 10 utils. In order to maximize his total utility, Garcia should aconsume more sodas and fewer hot dogs regardless of the prices bconsume more hot dogs and fewer sodas regardless of the prices cmaintain his current level of consumption of sodas and hot dogs regardless of the prices dmaintain his current level of consumption if the price of a soda is $1 and the price of a hot dog is $2 emaintain his current level of consumption if the price of a soda is $2 and the price of a hot dog is $1

To answer this question, we need to understand the concept of marginal utility per dollar spent. This is calculated by dividing the marginal utility of a good by its price. The goal is to maximize the total utility, which is achieved when the marginal utility per dollar spent is the same for all goods.

Let's calculate the marginal utility per dollar for both goods in the two price scenarios:

1. If the price of a soda is $1 and the price of a hot dog is$2:

   • The marginal utility per dollar for sodas is 5 utils/$1 = 5 utils per dollar.
   • The marginal utility per dollar for hot dogs is 10 utils/$2 = 5 utils per dollar.
   • In this case, Garcia should maintain his current level of consumption because the marginal utility per dollar is the same for both goods.

2. If the price of a soda is $2 and the price of a hot dog is$1:

   • The marginal utility per dollar for sodas is 5 utils/$2 = 2.5 utils per dollar.
   • The marginal utility per dollar for hot dogs is 10 utils/$1 = 10 utils per dollar.
   • In this case, Garcia should consume more hot dogs and fewer sodas because the marginal utility per dollar is higher for hot dogs.

So, the correct answer is: "d. maintain his current level of consumption if the price of a soda is $1 and the price of a hot dog is$2" and "b. consume more hot dogs and fewer sodas regardless of the prices" if the price of a soda is $2 and the price of a hot dog is$1.

To answer this question, we need to understand the concept of marginal utility per dollar spent. This is calculated by dividing the marginal utility of a good by its price. The goal is to maximize total utility by achieving an equal marginal utility per dollar spent on each good.

Let's calculate the marginal utility per dollar for both goods under the two different price scenarios:

1. If the price of a soda is $1 and the price of a hot dog is$2:

   • Marginal utility per dollar for sodas = 5 utils / $1 = 5 utils per dollar
   • Marginal utility per dollar for hot dogs = 10 utils / $2 = 5 utils per dollar

2. If the price of a soda is $2 and the price of a hot dog is$1:

   • Marginal utility per dollar for sodas = 5 utils / $2 = 2.5 utils per dollar
   • Marginal utility per dollar for hot dogs = 10 utils / $1 = 10 utils per dollar

In the first scenario, Garcia is maximizing his total utility because the marginal utility per dollar is the same for both goods. So, he should maintain his current level of consumption if the price of a soda is $1 and the price of a hot dog is$2. This corresponds to option D.

In the second scenario, the marginal utility per dollar is higher for hot dogs. Therefore, to maximize his total utility, Garcia should consume more hot dogs and fewer sodas. However, this option is not given in the question.