Jones buys two goods, A and B. Currently, Jones receives marginal utility of 24 utils from good A and pays a price of $1.50 per unit. Jones receives a marginal utility of 43 utils from good B and pays a price of $1.99 per unit. Jones receives __________ per dollar from good B as he does from good A.

Question

Quizplus · Accepted Answer

To determine the marginal utility per dollar for each good, divide the marginal utility by the price per unit. For good A, it's 24 utils/$1.50 = 16 utils per dollar. For good B, it's 43 utils/$1.99 = approximately 21.61 utils per dollar. Therefore, Jones receives more marginal utility per dollar from good B than from good A.

Jones Buys Two Goods, a and B