Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. Table 19.3
Michael's Utility Schedule
$\begin{array} { | c | r | c | c | c | c | }
\hline \begin{array} { c }
\text { Units of } \
\text { Cola }
\end{array} & \text { TU of Cola } & \begin{array} { c }
\text { MU of } \
\text { Cola }
\end{array} & \begin{array} { c }
\text { Units of } \
\text { Pretzels }
\end{array} & \begin{array} { c }
\text { TU of } \
\text { Pretzels }
\end{array} & \begin{array} { c }
\text { MU of } \
\text { Pretzels }
\end{array} \
\hline 1 & 46 & 40 & 1 & 30 & 30 \
\hline 2 & & 32 & 2 & & 20 \
\hline 3 & 96 & 24 & 3 & 66 & 16 \
\hline 4 & 112 & & 4 & 78 & \
\hline 5 & 124 & & 5 & 84 & \
\hline
\end{array}$ The marginal utility per dollar of the third pretzel is
A)4.
B)5.
C)6.
D)12.

Question

Assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. Table 19.3
Michael's Utility Schedule
$\begin{array} { | c | r | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Units of } \
\text { Cola }
\end{array} & \text { TU of Cola } & \begin{array} { c } 
\text { MU of } \
\text { Cola }
\end{array} & \begin{array} { c } 
\text { Units of } \
\text { Pretzels }
\end{array} & \begin{array} { c } 
\text { TU of } \
\text { Pretzels }
\end{array} & \begin{array} { c } 
\text { MU of } \
\text { Pretzels }
\end{array} \
\hline 1 & 46 & 40 & 1 & 30 & 30 \
\hline 2 & & 32 & 2 & & 20 \
\hline 3 & 96 & 24 & 3 & 66 & 16 \
\hline 4 & 112 & & 4 & 78 & \
\hline 5 & 124 & & 5 & 84 & \
\hline
\end{array}$ The marginal utility per dollar of the third pretzel is
A)4.
B)5.
C)6.
D)12.

Quizplus · Accepted Answer

The marginal utility of the third pretzel is 16. The price of a pretzel is $4. So the marginal utility per dollar of the third pretzel is 16/4 = 4.

Assume the Price of Cola Is $8 Per Unit and the Price