Amy purchased four cantaloupes at $2 each and three watermelons at $4 each. If Amy is following the optimal consumption rule, the marginal utility of the fourth cantaloupe and third watermelon are:

Question

Quizplus · Accepted Answer

The optimal consumption rule states that the marginal utility per dollar spent should be equal for all goods. For cantaloupes: MU/2 = MU of 4th cantaloupe, and for watermelons: MU/4 = MU of 3rd watermelon. Solving gives MU of 4th cantaloupe = 12 and MU of 3rd watermelon = 24.

Amy Purchased Four Cantaloupes at $2 Each and Three Watermelons