MRS and utility maximization Eleanor lives in Detroit and loves to eat desserts. She spends her entire weekly allowance on jello and ple. A bowl of jello is priced at $1.25, and a piece of pecan pie is priced at $5.00. At her current consumption point, Eleanor's marginal rate of substitution (MRS) of jello for ple is 4. This means that Eleanor is willing to trade four bowls of jello per week for one piece of pie per week. Does Eleanor's current bundle maximize her utility-in other words, make her as well off as possible? If not, how should she change it to maximize her utility? Eleanor could increase her utility by buying less jello and more ple per week. Eleanor's current bundle maximizes her utility, and she should keep it unchanged. Eleanor could increase her utility by buying more jello and less pie per week.
