Answer to Question #167617 in Microeconomics for Denisse Amano

Question

[Uses the Marginal Utility Approach] Anita consumes both pizza and Pepsi. The following tables show the amount of utility she obtains from different amounts of these two goods:

Pizza

Pepsi

Quantity

Utility

Quantity

Utility

4 slices

115

5 cans

63

5 slices

135

5 cans

75

6 slices

154

5 cans

86

7 slices

171

5 cans

96

73-80. Suppose Pepsi costs $0.50 per can, pizza costs $1 per slice, and Anita has $9 to spend on food and drink. What combination of pizza and Pepsi will maximize her utility?

Answer 1

Utility is maximized where MU of pizza/Price of Pizza = MU of Pepsi/Price of Pepsi 

$=(135-115)/1=20$

$=(96-86)/0.5=20$

5 canes of pizza and 5 canes of pepsi