soda                                  chips                                 pizza

27                                      18                                      40

21                                      15                                      35

12                                      12                                      25

1.As a cool co-worker you are invited to every party. You choose 5 items which works out to be __ soda __ chips and __ pizza before becoming full according to the marginal utility (MU) listed above.

a)You encounter the same at a concession stand where soda, chips and pizza are priced at $3, 1.50 and 5 respectively and choose 5 items which now is __ soda __ chips and __ pizza. How does the free selection differ from the paid? Why?

b)What is the difference in MU among the last items you selected for free?

2.What is the difference in MU/$ among the last items you paid for?

a)If four items were handed to you randomly, would you expect these differences to be bigger or smaller? Why?

b)You never paid for a 2nd soda or a 2nd pizza. If you chose a 2nd pizza slice and then were offered a 2nd soda in its place, you would demand _________ sodas in the place of a 2^nd slice.

3.Pizza price divided by soda price also equals _