Marginal Utility

-Lily has $10 to spend each week on fish and chicken. Fish costs $2 a serving and chicken costs $3 a serving. The table shows Lily's marginal utilities of fish and chicken. Lily will consume ________ servings of chicken and ________ of fish each week.
A) 4; 0
B) 1; 3
C) 0; 5
D) 2; 2

Question

Marginal Utility
 
-Lily has $10 to spend each week on fish and chicken. Fish costs $2 a serving and chicken costs $3 a serving. The table shows Lily's marginal utilities of fish and chicken. Lily will consume ________ servings of chicken and ________ of fish each week.
A) 4; 0 
B) 1; 3 
C) 0; 5 
D) 2; 2

Quizplus · Accepted Answer

Lily should allocate her budget such that the marginal utility per dollar spent is equal for both goods. With $10, she can buy 2 servings of chicken ($6) and 2 servings of fish ($4), maximizing her utility.

Marginal Utility -Lily Has $10 to Spend Each Week on Fish and Week