If total utility can be increased by purchasing a little more milk and a little less ice cream, the:
A)marginal utility of milk is greater than that of ice cream
B)marginal utility of ice cream is greater than that of milk
C)ratio of marginal utility of milk to its price is greater than that of ice cream
D)ratio of marginal utility of milk to its price is lesser than that of ice cream
E)marginal utility of ice cream is negative

Question

If total utility can be increased by purchasing a little more milk and a little less ice cream, the:​
A)marginal utility of milk is greater than that of ice cream
B)marginal utility of ice cream is greater than that of milk
C)ratio of marginal utility of milk to its price is greater than that of ice cream
D)ratio of marginal utility of milk to its price is lesser than that of ice cream
E)marginal utility of ice cream is negative

Quizplus · Accepted Answer

The consumer can increase total utility by reallocating spending towards the good with a higher marginal utility per dollar spent, indicating the ratio of marginal utility to price for milk is greater than that for ice cream.

If Total Utility Can Be Increased by Purchasing a Little