Suppose that Pete is currently consuming at a level in which

Suppose that Pete is currently consuming at a level in which his marginal utility of consuming an extra pizza (X) is 10 and his marginal utility of consuming an extra beer (Y) is 2. Assume that his preferences are convex. a. (2 pts) What is Pete

a) MRS is 10/2 = 5, i.e 5 beers for 1 pizza

b) yes he is because for 8.5 he gets utility of 10 while for 2.5 he gets just 2.