The marginal utility of good A is 6 and the marginal utility of good B is 15. The price of good A is $2. The price of good B must be ________ if the consumer is optimizing her utility.
A) $2
B) $5
C) $45
D) $15

Question

Quizplus · Accepted Answer

To optimize utility, the consumer should allocate spending between A and B so that the marginal utility per dollar spent is equal for both goods. 
Thus, for A: MUa/Pa = 6/2 = 3 
For B: MUb/Pb = 15/Pb 
Since these two ratios should be equal, we can set them equal to each other and solve for Pb:
3 = 15/Pb 
Pb = 15/3 = $5

The Marginal Utility of Good a Is 6 and the Marginal