Use the following to answer question:
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that the price of good X is $1 per unit and the price of good Y is $2 per unit,that you consume 4 units of good X and 2 units of good Y,and that you are spending all of your income.To maximize utility,assuming that the goods are divisible,you would consume _____ of X and _____ of Y.
A)less;less
B)more;more
C)less;more
D)more;less

Question

Use the following to answer question: 
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that the price of good X is $1 per unit and the price of good Y is $2 per unit,that you consume 4 units of good X and 2 units of good Y,and that you are spending all of your income.To maximize utility,assuming that the goods are divisible,you would consume _____ of X and _____ of Y.
A)less;less 
B)more;more 
C)less;more 
D)more;less

Quizplus · Accepted Answer

According to the table, the marginal utility per dollar spent on good X is greater than the marginal utility per dollar spent on good Y at the current consumption level of 4 units of X and 2 units of Y. This indicates that utility can be further increased by consuming more of X and less of Y. Therefore, the answer is D, more X and less Y.

Use the Following to Answer Question