Harold can consume either pens or milkshakes. The price of a pen is $1, and the price of a milkshake is $1. Harold figures that when his income is spent, his marginal utility from pens will be 10 and his marginal utility from milkshakes will be 8. Harold is better off
A)by consuming more pens and fewer milkshakes.
B)by consuming more pens and more milkshakes.
C)by consuming fewer pens and fewer milkshakes.
D)by consuming fewer pens and more milkshakes.
E)only if he makes more income.

Question

Quizplus · Accepted Answer

Harold should consume more pens and fewer milkshakes because the marginal utility per dollar spent on pens (10) is higher than that on milkshakes (8), indicating he gets more utility from spending on pens.

Harold Can Consume Either Pens or Milkshakes