Question

Jill smith, a careful utility maximizer, consumes only two goods, peanut butter and ice cream. she had just achieved the utility-maximizing solution in her consumption of the two goods when the price of peanut butter increases. as she adjusts to this event:

Answer 1

As she adjust to this event, SHE WILL CONSUME LESS PEANUT BUTTER AND MORE ICE CREAM.
Utility maximization is an economic concept, which consumers use when making purchases. Consumers usually try to get the greatest possible value from the least amount of money. Thus, the theory of utility is a theory of consumer behaviour, which explain how consumers allocate their incomes.