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Figure: Consumer Equilibrium I
The figure shows three of Owen's indifference curves for pizza and soda per week. Owen has $180 per month to spend on the two goods. The price of a pizza is $20, and the price of a soda is $1.50.
-(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. If Owen consumes 1.5 pizzas and 100 sodas, he:
A) is maximizing his total utility.
B) should consume more pizza and less soda to maximize his total utility.
C) should consume less pizza and more soda to maximize his total utility.
D) should consume more pizza and more soda to maximize his total utility.

Question

Use the following to answer questions:
Figure: Consumer Equilibrium I
The figure shows three of Owen's indifference curves for pizza and soda per week. Owen has $180 per month to spend on the two goods. The price of a pizza is $20, and the price of a soda is $1.50. 
-(Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I. If Owen consumes 1.5 pizzas and 100 sodas, he:
A) is maximizing his total utility. 
B) should consume more pizza and less soda to maximize his total utility. 
C) should consume less pizza and more soda to maximize his total utility. 
D) should consume more pizza and more soda to maximize his total utility.

Quizplus · Accepted Answer

Owen should consume more pizza and less soda to maximize his total utility because the marginal utility per dollar spent on pizza is likely higher than that on soda, indicating he can increase his total utility by reallocating his consumption towards more pizza.

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