A utility maximizing person gets marginal utility from consuming their last pencil and pen of 4 and 10 respectively.If pencils cost 10 cents a piece,the pens must cost 25 cents a piece.

Question

Quizplus · Accepted Answer

According to the law of diminishing marginal utility, the more of a particular good you consume, the less satisfaction you derive from consuming each additional unit. Therefore, the fact that the marginal utility of the last pencil is 4 and the marginal utility of the last pen is 10 suggests that the person values pens more highly than pencils. 
If pencils cost 10 cents each, then the marginal utility per dollar spent on pencils is 4/10 = 0.4 util per cent. Using the same logic, the marginal utility per dollar spent on pens is 10/25 = 0.4 util per cent. 
Since the marginal utility per dollar spent on both pencils and pens is the same, it suggests that the prices are indeed such that the person values pens twice as highly as pencils. Therefore, the answer is true.

A Utility Maximizing Person Gets Marginal Utility from Consuming Their