Consider a Consumer Who Spends All Income on Only Two

question 75

Multiple Choice

Consider a consumer who spends all income on only two goods: pizza and soda. An extra slice of pizza would give the consumer 60 extra utils, while an extra can of soda would give the consumer 20 extra utils. Pizza costs $3 per slice, and soda costs $1 per can. In this situation, the consumer:

• A) is buying too much pizza and not enough soda.
• B) should purchase more pizza and less soda.
• C) has maximized his or her total utility.
• D) needs to equate the marginal utilities for pizza and soda.

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