Question

Sue gets a total of 20 utils per week from her consumption of pizza and a total of 40 utils per week from her consumption of yogurt. The price of pizza is $1 per slice, the price of yogurt is $1 per cup, and she consumes 10 slices of pizza and 20 cups of yogurt each week. Which of the following statements is correct regarding Sue's current consumption of pizza and yogurt?a. Sue should eat more yogurt and less pizza, as she is getting more utils from the $20 spent on yogurt than from the $10 spent on pizza.b. Sue should eat more pizza and less yogurt, as she is getting more utils from her last dollar spent on pizza than her last dollar spent on yogurt.c. We cannot determine if Sue is maximizing her total utility with the information provided.d. Sue should eat more yogurt and less pizza, as she is getting more utils from her last dollar spent on yogurt than her last dollar spent on pizza.

Answer 1

The most correct option is option c. "WE CANNOT DETERMINE IF SUE IS MAXIMIZING HER TOTAL UTILITY FROM THE INFORMATION PROVIDED"

Explanation: Utility is the satisfaction derived from consuming a goods. from the information provided, their is no condition provided, on how Sue should eat Pizza and yogurt in order to be satisfied. The information only provided us with how Sue is consuming pizza and yogurt.

It will be wrong to conclude how Sue should consume Pizza and yogurt, because Sue may be satisfied with the utility she drives in the way she eats pizza and yogurt.