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Rising the level of utility

Kelly spends his whole food budget on steak and doughnuts, and could trade 2 pounds of steak for 4 doughnuts devoid of changing his level of satisfaction. When the price of doughnuts is 50 cents and steak is $2.00 per pound, Kelly will most likely adjust by: (i) Increasing his food budget and cutting spending on the entertainment. (ii) Replacing some steak for few doughnuts to increase his level of utility. (iii) Replacing some doughnuts for little steak to increase his level of utility. (iv) Become a vegetarian.

Choose the right answer from the above options.

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