Jon is consuming X and Y so that he is spending his entire income and MU_x/P_x = 4 and MU_y/P_y = 4. To maximize utility, he should consume A) the same amount of X and Y since he is already maximizing utility. B) less of both X and Y. C) more X and less Y. D) less X and more Y.

Question

Quizplus · Accepted Answer

Jon is already maximizing his utility because the marginal utility per dollar spent on both goods X and Y is equal, which is a condition for utility maximization according to consumer theory.

Jon Is Consuming X and Y So That He Is