Suppose that the price of a pizza is $10 and that the price of a blouse is $30.At her present level of consumption,Magda's ratio of marginal utility of pizza to marginal utility of blouses is 1/4.To maximize total utility,she should
A)buy more pizzas and fewer blouses
B)buy fewer pizzas and more blouses
C)continue to buy the same quantities of pizza and blouses
D)spend more time consuming pizza
E)spend more time buying blouses

Question

Quizplus · Accepted Answer

To maximize total utility, Magda should equalize the marginal utility per dollar spent on each good. Currently, the marginal utility per dollar for pizza is higher than for blouses (1/4 vs 1/3), so she should buy more pizzas and fewer blouses.

Suppose That the Price of a Pizza Is $10 and That