The price of good X is $16.00, the price of good Y is $24.00, and the marginal utility from the last unit of good X consumed is 48 units of satisfaction. To maximize total satisfaction from consuming this amount of goods X and Y, the marginal utility for good Y must be:

Question

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To maximize total satisfaction, consumers should allocate their budget in a way that the marginal utility per dollar spent on each good is equal. The marginal utility per dollar for good X is 48 units of satisfaction / $16 = 3 units of satisfaction per dollar. To find the marginal utility for good Y that would equalize the marginal utility per dollar, we set it equal to 3 units of satisfaction per dollar: MU_Y / $24 = 3. Solving for MU_Y gives MU_Y = 72 units of satisfaction.

The Price of Good X Is $16