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The last cup of coffee I bought gave me a marginal utility of 10, bringing my total utility from all cups of coffee I have purchased to 200. The last pizza I bought gave me a marginal utility of 50, bringing my total utility from all pizzas purchased to 750 (I really like pizza!). The price of a cup of coffee is $2. The price of a pizza is $10. I have no more money to spend.

How might I have reallocated my spending so as to maximize my total satisfaction from pizza and coffee?

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The amount of utility is measured.

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In this case, we do not need to worry about the total utilities. What matters here is only the marginal utility. We also need to assume that the person has $10 to either buy 1 pizza or 5 cups of ...

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