Sasha is a rational consumer that is behaving optimally when he buys candy and movie tickets. When he buys 9 movie tickets at $\$ 10$ each, his marginal utility is 100 utils per dollar spent.

If the price of candy is $\$ 5$, what is the marginal utility he is getting from the last bag of candy he has purchased?

Choose 1 answer:
(A) 500 utils
(B) 100 utils
(c) 60 utils
(D) 90 utils
(E) 20 utils

Question

Sasha is a rational consumer that is behaving optimally when he buys candy and movie tickets. When he buys 9 movie tickets at $\$ 10$ each, his marginal utility is 100 utils per dollar spent.

If the price of candy is $\$ 5$, what is the marginal utility he is getting from the last bag of candy he has purchased?

Choose 1 answer:
(A) 500 utils
(B) 100 utils
(c) 60 utils
(D) 90 utils
(E) 20 utils

Accepted Answer

***D*** ∻Key Concept∻ ⚹Marginal Utility per Dollar⚹ ∻Explanation∻ ⚹A rational consumer allocates their budget in such a way that the marginal utility per dollar spent on each good is equal. Given that the marginal utility of movie tickets is 100 utils per dollar and the price of candy is $5, the marginal utility of the last bag of candy must be $5 imes 100 = 500 utils.⚹◊What is the formula for calculating marginal utility in Microeconomics?⍭ Generate me a similar question◊

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