Lisa spends all her income on pizzas and soda. The table below shows Lisa's marginal utility for pizza and marginal utility for soda. If the price of pizza is $10, the price of soda is $5, and Lisa has
$40 to spend on the two goods:
1. State the equation of Lisa's equilibrium.
2. Construct a table based on the equation from the table below.
3. How much is the marginal utility per dollar at equilibrium?
4. What combination of the two goods will maximize her total utility? (Explain your answer.)
5. How much is the total utility acquired from the combination of the two goods? (Show
your work.)
Units
MU of Soda
MU of pizza
1
150
200
2
120
180
3
100
150
4
90
120
5
60
100
6
40
60
dos
2 Pizzas