Author Question: Lisa spends all her income on pizzas and DVDs. The above table shows Lisa's marginal utility for ... (Read 224 times)

mikaylakyoung

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Lisa spends all her income on pizzas and DVDs. The above table shows Lisa's marginal utility for pizza and marginal utility for DVDs.
 
  If the price of a pizza is 10 and the price of a DVD is 10 and Lisa has 60 to spend on the two goods, what combination of pizza and DVDs will maximize her utility? A) 2 DVDs and 4 pizzas
  B) 3 DVDs and 5 pizzas
  C) 4 DVDs and 2 pizzas
  D) 3 DVDs and 3 pizzas

Question 2

Monopolistic competition is a market structure in which
 
  A) a small number of firms compete.
  B) firms produce identical products.
  C) firms compete only on product price.
  D) firms are free to enter and exit the market.



Joy Chen

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Answer to Question 1

A

Answer to Question 2

D



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