Question

Sharon has eaten a lot of pizza in the past few years. In fact, she’s growing tired of pizza. Recently, she realized that pizza no longer brings her the same satisfaction, falling from 12 utils to 7 utils. Benefiting from higher productivity, Sharon’s favorite pizzeria also lowered prices from $2 to $1 per slice. What happens to Sharon’s marginal utility per dollar spent?

Answer 1

Answer:

the Sharon's marginal utility per dollar increases

Explanation:

We have given

In present scenario

Marginal utility derived = 12

And price per unit = $2

So marginal utility per $ $=\frac{12}{2}= 6$

Now in revised scenario

Number of utility derived = 7

And And price per unit = $1

So marginal utility per $ $=\frac{7}{1}= 7$

So the Sharon's marginal utility per dollar increases