Tyrell is consuming X and Y so that he is spending his entire income and MU_x/P_x = 7 and MU_y/P_y = 7. 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

Tyrell is maximizing his utility because the marginal utility per dollar spent on both goods X and Y is equal, which is consistent with the utility maximization condition.

Tyrell Is Consuming X and Y So That He Is