Juan is consuming 3 sandwiches and 6 sodas.If a sandwich costs twice as much as a soda,then
A) Juan should buy more sodas.
B) Juan should buy more sandwiches.
C) Juan is maximizing his utility if he derives twice as much utility from the last soda as from the last sandwich.
D) Juan is maximizing his utility if he derives twice as much utility from the last sandwich as from the last soda.

Question

Quizplus · Accepted Answer

Juan is maximizing his utility if the marginal utility per dollar spent is equal across all goods. Since a sandwich costs twice as much as a soda, he should derive twice as much utility from the last sandwich consumed as from the last soda to maximize utility, according to the principle of marginal utility per dollar spent.

Juan Is Consuming 3 Sandwiches and 6 Sodas