Joan is deciding where to spend her spring break. If she goes to Cancún, Mexico, the trip will give her 9,000 units of utility and will cost her $300. If she travels to Florida instead, the trip will give her 8,000 units of utility and will cost her only $200. Joan will do best going to:
A) Mexico because her total pleasure will be greater.
B) Florida because her total cost will be lower.
C) Mexico because her pleasure per dollar will be greater.
D) Florida because her pleasure per dollar will be greater.

Question

Quizplus · Accepted Answer

Joan should choose the option with the highest utility per dollar spent. In Mexico, she gets 9,000 units of utility for $300, which is 30 units per dollar. In Florida, she gets 8,000 units of utility for $200, which is 40 units per dollar. Therefore, Florida offers more utility per dollar.

Joan Is Deciding Where to Spend Her Spring Break