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Table 21-3

Ethan Consumes Two Goods, Milk and Pretzels

Question 176

Multiple Choice

Table 21-3

Ethan consumes two goods, milk and pretzels. Milk costs $2 per glass, and he consumes it to the point where the marginal utility he receives from his last glass of milk is 6. Pretzels cost $4 per bag. The relationship between the marginal utility Ethan gets from eating a bag of pretzels and the number of bags he eats per month is as follows:

 Bags of Pretzels  Marginal Utility 130220312465260\begin{array} { | c | c | } \hline \text { Bags of Pretzels } & \text { Marginal Utility } \\\hline 1 & 30 \\\hline 2 & 20 \\\hline 3 & 12 \\\hline 4 & 6 \\\hline 5 & 2 \\\hline 6 & 0 \\\hline\end{array}

-Samantha is maximizing total utility while consuming food and clothing. Her marginal utility from food is 50, and her marginal utility from clothing is 25. If clothing is priced at $10 per unit, the price of food per unit must be


A) $2.
B) $2.50.
C) $5.
D) $20.

Correct Answer:

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