If Paloma is consuming the utility-maximizing quantities of pizza and soda pop:
A) the price of pizza equals the price of soda pop.
B) the marginal utility of pizza is equal to the marginal utility of soda pop.
C) the ratio of the marginal utility to price is the same for pizza and for soda pop.
D) the total utility of pizza is equal to the total utility of soda pop.

Question

Quizplus · Accepted Answer

The utility-maximizing rule states that consumers allocate their income so that the last dollar spent on each good provides the same marginal utility per dollar spent.

If Paloma Is Consuming the Utility-Maximizing Quantities of Pizza and Soda