Table 21-1
The relationship between the marginal utility that George gets from eating a bag of cookies and the number of bags he eats per month is as follows:

-Refer to Table 21-1.George consumes two goods,milk and cookies.He has maximized his utility given his income.Milk costs $2 per litre and he consumes it to the point where the marginal utility he receives from milk is 8.Cookies cost $5 per bag.How many bags of cookies does George buy each month
A)1
B)2
C)3

Question

Table 21-1
The relationship between the marginal utility that George gets from eating a bag of cookies and the number of bags he eats per month is as follows:

-Refer to Table 21-1.George consumes two goods,milk and cookies.He has maximized his utility given his income.Milk costs $2 per litre and he consumes it to the point where the marginal utility he receives from milk is 8.Cookies cost $5 per bag.How many bags of cookies does George buy each month
A)1 
B)2 
C)3

Quizplus · Accepted Answer

The marginal utility of cookies is 10/5 = 2. Since the marginal utility of milk is 8 and the marginal utility of cookies is 2, George will consume 4 bags of cookies (8/2 = 4).

Table 21-1 the Relationship Between the Marginal Utility That George Gets from Gets