Suppose apples come in two quality levels, low quality and high quality. At a store in the apple-growing region, the price of low-quality apples is $1 per pound, and the price of high-quality apples is $4 per pound.
Timmy lives in the apple-growing region and buys 8 pounds of each type. His marginal utility of low-quality apples is 3 utils and his marginal utility of high-quality apples is 12 utils.
1. Is Timmy maximizing his utility?
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