Assume that diminishing marginal utility applies to both coffee and football tickets and that the consumer is spending all of her income.If a consumer purchases a combination of coffee and football tickets such that MU_Coffee/ /P_Coffee = 20 and MU_Football _tickets/ /P_Football _tickets = 10,to maximize utility,the consumer should buy _____ coffee and _____ football tickets. A)less;more B)more;fewer C)more;more D)less;fewer

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Quizplus · Accepted Answer

To maximize utility, the consumer should adjust their consumption to equalize the marginal utility per dollar spent across all goods. Since the marginal utility per dollar spent on coffee (20) is higher than that for football tickets (10), the consumer should buy more coffee and fewer football tickets to equalize these ratios.

Assume That Diminishing Marginal Utility Applies to Both Coffee and Football