Author Question: Joshua consumes pizza and cola so that the marginal utility per dollar spent for the last piece of ... (Read 29 times)

kellyjaisingh · **on:** Jul 1, 2018

Joshua consumes pizza and cola so that the marginal utility per dollar spent for the last piece of pizza consumed per week is 3 while the marginal utility per dollar spent for the last cola consumed is 1.5 . Joshua should spend more of his income on pizza and less on cola in order to maximize utility.
a. True
b. False

Question 2

Water is essential to life while diamonds, while beautiful, are not essential to life. In the marketplace, diamonds are very expensive while water is relatively cheap. We can resolve this paradox by focusing on
a. total utility rather than average utility
b. average utility rather than marginal utility
c. marginal utility rather than total utility
d. total utility rather than marginal utility
e. average utility rather than total utility