Suppose that Janis is maximizing her total utility from chairs and tables.If the marginal utility of the last table she purchased is 200 utils,and the prices of chairs and tables are $50 and $100,respectively,then the marginal utility of the last chair she purchased
A)is 100 utils
B)is 400 utils
C)is 200 utils
D)is 50 utils
E)cannot be determined without more information

Question

Quizplus · Accepted Answer

To maximize utility, the ratio of marginal utility to price should be equal for both goods. So, MU_table/Price_table = MU_chair/Price_chair. Given MU_table = 200 utils and Price_table = $100, MU_chair/50 = 200/100, thus MU_chair = 100 utils.

Suppose That Janis Is Maximizing Her Total Utility from Chairs