Question

# (Table: Utility from Pizza and Beer) Use Table: Utility from Pizza and Beer. At All-Sports Bar,...

(Table: Utility from Pizza and Beer) Use Table: Utility from Pizza and Beer. At All-Sports Bar, a bottle of beer costs \$4, and a slice of pizza costs \$2. Denard has \$10 to spend on beer and pizza. To maximize his utility, Denard will consume _____ slice(s) of pizza and _____ bottle(s) of beer. The data chart in the image is titled "Utility from Pizza and Beer." For marginal utility of slice of pizza, it shows two columns, first depicting "slices of pizza" and second depicting "marginal utility of slice of pizza." It shows a zigzag with small corners at variable angles, tracing a path between the two columns. The numbers marked on the left corners of the zigzag are 0, 1, 2, 3, 4, and 5. The numbers marked on the right corners of the zigzag are 100, 80, 60, 40, and 20. For marginal utility of bottle of beer, it shows two columns, first depicting "bottles of beer" and second depicting "marginal utility of bottle of beer." It shows zigzag with small corners at variable angles, tracing a path between the two columns. The numbers marked on the left corners of the zigzag are 0, 1, 2, 3, 4, and 5. The numbers marked on the right corners of the zigzag are 400, 200, 80, 30, and 20.

 Slices of Pizza Marginal utility of slice of pizza Bottles of Beer Marginal utility of Bottle of Beer 0 0 1 100 1 400 2 80 2 200 3 60 3 80 4 40 4 30 5 20 5 20

We know that at equilibrium Here P1/P2=2/4=1/2

The budget line is given by At Slice of pizza 1 and 2 beer bottle, the ratio become 1/2. hence it is the equilibrium condition

1 Slice of Pizza \$2

2 Bottle of beer \$8

Which satisfy the budget line.

To maximize his utility, Denard will consume 1 slice of pizza and 2 bottles of beer.