(Table) Based on the table, how much pizza and soda will Ryan consume with a $10 budget if the price of a hot dog is $2 and the price of a soda is $2?
$\begin{array}{|c|c|c|c|c|c|}
\hline \begin{array}{c}
\text { Quantity } \
\text { of Soda }
\end{array} & \begin{array}{c}
\text { Marginal } \
\text { Utility }
\end{array} & \begin{array}{c}
\boldsymbol{M U} \
\text { (soda)/S }
\end{array} & \begin{array}{c}
\text { Quantity } \
\text { of Hot Dogs }
\end{array} & \begin{array}{c}
\text { Marginal } \
\text { Utility }
\end{array} & \begin{array}{c}
\text { MU } \
\text { (hot dogs)/S }
\end{array} \
\hline 1 & 32 & 16 & 1 & 28 & 14 \
\hline 2 & 24 & 12 & 2 & 24 & 12 \
\hline 3 & 20 & 10 & 3 & 22 & 11 \
\hline 4 & 16 & 8 & 4 & 16 & 8 \
\hline 5 & 5 & 2.5 & 5 & 6 & 3 \
\hline
\end{array}$
A) one hot dog and four sodas
B) four hot dogs and one soda
C) two hot dogs and three sodas
D) three hot dogs and two sodas

Question

Quizplus · Accepted Answer

Ryan will aim to maximize his utility within his $10 budget. Given the prices, he can afford a combination of items that sum up to $10. The table shows the marginal utility per dollar spent (MU/$) for both sodas and hot dogs. To maximize utility, Ryan should consume items in the order of their MU/$, balancing the last unit's MU/$ of each item consumed. Starting with the highest MU/$, he would first consume items with MU/$ of 16, 14, 12, 12, and then 11, which corresponds to consuming three hot dogs and two sodas before the marginal utility per dollar spent equalizes and his $10 budget is exhausted.

(Table) Based on the Table, How Much Pizza and Soda