Chloe allocates her weekly entertainment budget between streaming subscriptions (SSS) and cinema tickets (CCC). The price of a streaming subscription is PS=£10P_S = £10PS=£10 and the price of a cinema ticket is PC=£12P_C = £12PC=£12. Currently, Chloe is consuming a combination of these goods such that her marginal utility from streaming is MUS=50MU_S = 50MUS=50 utils and her marginal utility from cinema tickets is MUC=72MU_C = 72MUC=72 utils. According to traditional economic theory, to maximise her total utility from her fixed budget, Chloe should:
increase her consumption of streaming subscriptions and decrease her consumption of cinema tickets.
increase her consumption of cinema tickets and decrease her consumption of streaming subscriptions.
maintain her current consumption of both goods as her total utility is already maximised.
decrease her consumption of both goods to minimise her total expenditure.
