Question

Sasha buys a cold soda and a slice of warm pizza. The marginal utility from a soda is 80, and the price of the soda is two dollars if the price of a slice of pizza is one dollar what would be marginal utility of the pizza slice that would make her to maximize satisfaction? Pit to maximize satisfaction a consumer must have equals marginal utility per dollar spent on all items the consumer buys

Answer 1

To maximize satisfaction, the marginal utility of Sasha's pizza slice should be 40 utils, equaling the marginal utility per dollar of the soda she buys.

Step-by-step explanation:

To determine the marginal utility of the pizza slice that maximizes satisfaction for Sasha, we apply the principle of equal marginal utility per dollar spent on all items.

Given the marginal utility of the soda is 80 and the price is $2, the marginal utility per dollar for soda is 80 utils / $2, which equals 40 utils per dollar.

To maximize satisfaction, the utility per dollar for the pizza should also be 40 utils per dollar. Since the price of a pizza slice is $1, the marginal utility for the pizza needs to be 40 utils (40 utils per dollar times $1).