Pizza CDs

-Bobby spends $100 per month on pizza and CDs. His utility from these goods is shown in the table above. The price of a pizza is $10 and the price of a CD is $20. Which of the following combinations of the two goods maximizes Bobby's utility?
A) 2 pizzas and 4 CDs
B) 6 pizzas and 2 CDs
C) 4 pizzas and 3 CDs
D) 8 pizzas and 1 CDs

Question

Pizza CDs
 
-Bobby spends $100 per month on pizza and CDs. His utility from these goods is shown in the table above. The price of a pizza is $10 and the price of a CD is $20. Which of the following combinations of the two goods maximizes Bobby's utility?
A) 2 pizzas and 4 CDs 
B) 6 pizzas and 2 CDs 
C) 4 pizzas and 3 CDs 
D) 8 pizzas and 1 CDs

Quizplus · Accepted Answer

To maximize utility, Bobby should allocate his budget such that the marginal utility per dollar spent on each good is equal. Given the prices, Bobby should compare the utility gained per dollar from pizzas and CDs and choose the combination that maximizes his total utility within his $100 budget.

Pizza CDs -Bobby Spends $100 Per Month on Pizza and CDs. His