If Lisa spends her income on veggie burgers and pints of soy milk and the price of veggie burgers is three times the price of a pint of soy milk, then when Lisa maximizes her utility she will buy
A)both goods until the marginal utility of veggie burgers is three times the marginal utility of soy milk.
B)three times as many veggie burgers as pints of soy milk.
C)three times as many pints of soy milk as veggie burgers.
D)both goods until the marginal utility of a pint of soy milk is three times the marginal utility of veggie burgers.

Question

Quizplus · Accepted Answer

When maximizing utility, Lisa will purchase goods such that the ratio of the marginal utility to price is equal for both goods. Since the price of veggie burgers is three times that of soy milk, the marginal utility of veggie burgers should be three times that of soy milk.

If Lisa Spends Her Income on Veggie Burgers and Pints