Milkshakes Sodas

-The table above shows Tom's total utility from milkshakes and sodas. A milkshake costs $2.00. What is the marginal utility per dollar spent when the eighth milkshake is purchased?
A) 32 units per dollar
B) 20 units per dollar
C) 16 units per dollar
D) 10 units per dollar

Question

Milkshakes Sodas
 
-The table above shows Tom's total utility from milkshakes and sodas. A milkshake costs $2.00. What is the marginal utility per dollar spent when the eighth milkshake is purchased?
A) 32 units per dollar 
B) 20 units per dollar 
C) 16 units per dollar 
D) 10 units per dollar

Quizplus · Accepted Answer

The marginal utility of the eighth milkshake is the change in total utility from the seventh to the eighth milkshake. If the total utility increases by 32 units from the seventh to the eighth milkshake, and each milkshake costs $2.00, the marginal utility per dollar is 32 units / $2 = 16 units per dollar.

Milkshakes Sodas -The Table Above Shows Tom's Total Utility from Milkshakes and Utility