Final answer:
The correct answer is option b. The price of pineapples that would maximize Vicky's utility, given the marginal utilities and the price of oranges, is $4. This is determined by setting the ratio of marginal utility to price equal for both oranges and pineapples and solving for the price of pineapples.
Step-by-step explanation:
Using the utility maximization rule, if Vicky's marginal utility of the last orange consumed is 20 and her marginal utility of the last pineapple consumed is 80, we apply the principle that in order to maximize utility, the ratio of the marginal utility to the price for all goods should be equal. If we denote the price of oranges as $1 (given in the question) and the price of pineapples as Ppineapples, the utility maximization condition can be written mathematically as:
MUoranges / Poranges = MUpineapples / Ppineapples
Substituting the given values, we get:
20 / 1 = 80 / Ppineapples
Therefore, to find the price of pineapples that would maximize utility, we solve for Ppineapples:
20 * Ppineapples = 80 * 1
Ppineapples = 80 / 20
Ppineapples = 4
Thus, the price of pineapples that would maximize Vicky's utility, given that the price of oranges is $1, is $4. This makes the correct option (b) $4.