movie which gives the same marginal utility per dollar as the first T-shirt purchase. José has just enough

budget to purchase both. So in total, José will purchase six movies and one T-shirt.

Quantity of

Total

Marginal

Marginal Utility

Quantity of

Total

Marginal

Marginal Utility

T-Shirts

Utility

Utility

per Dollar

Movies

Utility

Utility

per Dollar

1

2

3

4

5

6

7

22

43

63

81

97

111

123

22

21

20

18

16

14

12

22/$14=1.6

21/$14=1.5

20/$14=1.4

18/$14=1.3

16/$14=1.1

14/$14=1

12/$14=1.2

1

2

3

4

5

6

7

16

31

45

58

70

81

91

16

15

14

13

12

11

10

16/$7=2.3

15/$7=2.14

14/$7=2

13/$7=1.9

12/$7=1.7

11/$7=1.6

10/$7=1.4

TABLE 6.5 Marginal Utility per Dollar

A Rule for Maximizing Utility

This process of decision making suggests a rule to follow when maximizing utility. Since the price of T-shirts is

twice as high as the price of movies, to maximize utility the last T-shirt that José chose needs to provide exactly
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