Your marginal utility of a third waffle is 10 and your marginal utility of a second piece of ham is 30.If you eat the third waffle, which of the following must be true?
A)You are irrational.
B)You prefer waffles.
C)The price of a waffle is less than one third the price of a piece of ham.
D)The price of a waffle is more than the price of a piece of ham.
E)The price of a waffle is three times the price of a piece of ham.

Question

Quizplus · Accepted Answer

The marginal utility per dollar spent should be equal for both goods for utility maximization. If you choose the waffle, its price must be less than one third of the ham's price to equate the marginal utility per dollar.

Your Marginal Utility of a Third Waffle Is 10 and Your