If Katie purchases two slices of pizza and six breadsticks to maximize her total utility,then
A)a slice of pizza costs three times as much as a breadstick.
B)her marginal utility from the second slice of pizza divided by the price of a slice of pizza is equal to her marginal utility from the sixth breadstick divided by the price of a breadstick.
C)a breadstick costs three times as much as a slice of pizza.
D)she spends more on pizza than she spends on breadsticks.
E)B and D are both correct.

Question

Quizplus · Accepted Answer

To maximize total utility, Katie should consume pizza and breadsticks until their marginal utilities per dollar are equal. This means that the marginal utility of the second slice of pizza divided by its price should be equal to the marginal utility of the sixth breadstick divided by its price. We cannot determine the actual prices of the pizza and breadsticks from this information, but we know that they are not necessarily equal. Therefore, A, C, and D are all incorrect. B is the correct choice.

If Katie Purchases Two Slices of Pizza and Six Breadsticks