Catherine is having dinner at the Yellow Restaurant. She wants desert after eating her entree.

She is trying to decide between a cookie or a slice of pie.

The cost of a cookie is $5 and the cost of a slice of pie is $8.

Refer to the Marginal Utility spreadsheet provided below

Marginal Utility: Cookie Marginal Utility: Slice of Pie

Quantity Consumed Total Utility Marginal Utility Utility per Dollar Quantity Consumed Total Utility Marginal Utility Utility per Dollar

1 18 18 1 16 16

2 34 2 30

3 49 3 42

4 61 4 51

5 71 5 60

6 79 6 68

7 84 7 74

8 87 8 76

1. Compute the marginal utility for cookie and slice of pie
2. Compute the marginal utility per dollar
3. What is the utility maximizing choice for a cookie and slice of pie?
4. Explain what the utility maximizing choice means.
5. Discuss how you could use marginal utility to make consumer choices