Question

Suppose that the price of a pizza is $10 and the price of a video game is $30. Currently, Aaron is consuming such that the ratio of his marginal utility of pizza to marginal utility of video games is 1/4. If he wants to maximize his utility, what should he do?a. Buy more pizzas and fewer video gamesb. Buy more pizzas and more video gamesc. Buy fewer pizzas and video gamesd. Buy fewer pizzas and more video games

Answer 1

Answer:

Buy more pizzas and fewer games.

Explanation:

To find out marginal utility, that is, the mix of merchandise and enterprises that will amplify a person's complete utility, comes down to looking at the exchange offs between one reasonable blend with the various moderate mixes.

A great many people approach their utility-boosting blend of decisions in a bit by bit way. This bit by bit approach depends on taking a gander at the trade offs, estimated as far as minimal utility, of expending less of one great and a greater amount of another. You can think about this bit by bit approach.