Suppose that Coke and Sprite each sell for $2 a can. Each month Joe buys 6 cans of Sprite and 30 cans of Coke. From this we can infer that:
A)Joe is buying too many cans of Sprite.
B)Joe is buying too many cans of Coke.
C)Joe is maximizing his utility if his marginal utility from the 6ᵗʰ can of Sprite he buys is less than his marginal utility from the 30ᵗʰ can of Coke he buys.
D)Joe is maximizing his utility if his marginal utility from the 6ᵗʰ can of Sprite he buys is equal to his marginal utility from the 30ᵗʰ can of Coke he buys.

Question

Quizplus · Accepted Answer

According to the rational spending rule, at a consumer's optimal consumption bundle the ratio of marginal utility to price must be the same for all goods. Thus, if Sprite and Coke each cost $1 per can, then Joe is maximizing his utility if his marginal utility from the 6ᵗʰ can of Sprite he buys is equal to his marginal utility from the 30ᵗʰ can of Coke he buys.

Suppose That Coke and Sprite Each Sell for $2 a Can