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Joseph is consuming three units of pizza and two units of soda. The price of pizza is $5 and the price of soda is $1. If he is consuming the optimal consumption bundle and his marginal utility of the third unit of pizza is 50, his marginal utility of the second soda is:
A. 50.
B. 5.C. impossible to determine unless you know Joseph's income.
D. 10.

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jepessoa

Answer:

D) 10

Explanation:

Joseph is consuming pizzas at $5 per slice and sodas as $1 per soda.

If the marginal utility of the third slice is 50, then the utils per dollar = 50 / $5 = 10 utils per dollar.

Since the soda costs $1, and it provides the same utils per dollar as the pizza, then the marginal utility = $1 x 10 utils per dollar = 10 utils

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