Question
7. (16 points) Use the following table to answer the questions below. Quantity ConsumedTotal UtilityTotal Utility (per week) of Pizza of Pepsi 000 1242668 25521200
7. (16 points) Use the following table to answer the questions below.
Quantity ConsumedTotal UtilityTotal Utility
(per week)of Pizzaof Pepsi
000
1242668
25521200
37921632
49962016
511762316
613442556
715062712
816262736
917282664
1018182448
Answer the following questions.Assume that the price of pizza is $1 per slice and the price of a large Pepsi is $2.
A. Calculate the marginal utility of each unit of pizza and Pepsi.
B. Using the prices mentioned above, calculate the marginal utility per dollar of pizza and Pepsi.
C. With $20 to spend per week, what amount of pizza and Pepsi will maximize satisfaction?
(Find the utility-maximizing combination of pizza and Pepsi).
D. What is the total amount of utility from the combination computed in part C, i.e. the total utility from the pizza slices plus the total utility from Pepsis?
E. Given your answer in C, explain why buying two more slices of pizza and 1 less Pepsi makes the person worse off.
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