-Given the data in the above table, income of $13, a price of $1 for a bottle of water and $2 for a hamburger, what is the marginal utility per dollar spent on water and on hamburgers when the consumer is in consumer equilibrium?
A) 20 units of utility per dollar spent
B) 10 units of utility per dollar spent
C) 5 units of utility per dollar spent
D) 1 unit of utility per dollar spent

Question

-Given the data in the above table, income of $13, a price of $1 for a bottle of water and $2 for a hamburger, what is the marginal utility per dollar spent on water and on hamburgers when the consumer is in consumer equilibrium?
A) 20 units of utility per dollar spent 
B) 10 units of utility per dollar spent 
C) 5 units of utility per dollar spent 
D) 1 unit of utility per dollar spent

Quizplus · Accepted Answer

In consumer equilibrium, the marginal utility per dollar spent on each good is equal. If the price of water is $1 and the price of a hamburger is $2, the marginal utility per dollar spent on both should be equal. Given the options, 5 units of utility per dollar spent is a reasonable assumption for equilibrium.

-Given the Data in the Above Table, Income of $13