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Question
Peter consumes bags of potato chips and cans of soft drink. The marginal utility of bags of potato chips is 10 utils per bag and the marginal utility of cans of soft drink is 50 utils per can. Potato chips cost $0.50 a bag, and a can of soft drink costs $1.00. What should Peter do?
A) Peter should eat more chips, because they cost less.
B) Peter should buy more chips and less soft drink.
C) Peter should buy more soft drink, because it costs less.
D) Peter should buy more soft drink and fewer potato chips.
Answer
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