Suppose for a consumer the marginal utility (MU) of bread is 20 utils and the MU of milk is 10 utils; the price of bread is $3 and the price of milk is $1. Given this,
A)more utility per dollar is gained from consuming bread than milk.
B)more utility per dollar is gained from consuming milk than bread.
C)the same amount of utility per dollar is gained from consuming milk as bread.
D)the consumer is in consumer equilibrium.

Question

Quizplus · Accepted Answer

The utility per dollar for bread is 20 utils / $3 = 6.67 utils per dollar, and for milk, it's 10 utils / $1 = 10 utils per dollar. Therefore, more utility per dollar is gained from consuming milk than bread.

Suppose for a Consumer the Marginal Utility (MU) of Bread