Kati-Lyn has to choose between eating Chinese food and Indian food.Both Chinese food and Indian food cost the same.Which of the following equations,where MU is marginal utility and U is total utility,will lead to the optimal level of consumption?

Question

Quizplus · Accepted Answer

In order to find the optimal level of consumption, Kati-Lyn should consume the food that provides the highest marginal utility per dollar spent until the marginal utility of both options is equal. Since both Chinese food and Indian food cost the same, the equation that will lead to the optimal level of consumption is: MU_Chinese = MU_Indian This means that Kati-Lyn should consume both foods until the marginal utility per dollar spent is the same for each option.

Kati-Lyn Has to Choose Between Eating Chinese Food and Indian