Katie has a choice of spending $6.00 for another hamburger, which has a marginal utility of 30, or $9.00 for another pizza. For her to choose the pizza, it would have to have a marginal utility of at least
A) 9.
B) 30.
C) 31.
D) 46.

Question

Quizplus · Accepted Answer

The marginal utility per dollar spent on the hamburger is 30/6 = 5. For the pizza to be a better choice, its marginal utility per dollar must be at least 5, so the pizza's marginal utility must be at least 5 * 9 = 45. Since 46 is the closest option greater than 45, the correct answer is 46.

Katie Has a Choice of Spending $6