In the following graph the price of Y is $50.At point A,
A)the consumer can exchange two units of X for one unit of Y and keep utility unchanged.
B)the consumer can exchange two units of X for one unit of Y and keep income unchanged.
C)the consumer receives twice as much marginal utility from X as from Y.
D)both a and b
E)all of the above

Question

In the following graph the price of Y is $50.At point A, 
A)the consumer can exchange two units of X for one unit of Y and keep utility unchanged. 
B)the consumer can exchange two units of X for one unit of Y and keep income unchanged. 
C)the consumer receives twice as much marginal utility from X as from Y. 
D)both a and b 
E)all of the above

Quizplus · Accepted Answer

At point A, the slope of the indifference curve is equal to the slope of the budget constraint, which means the consumer can exchange two units of X for one unit of Y and remain on the same indifference curve (option A). Additionally, because the price ratio of X and Y is 2:1, exchanging two units of X for one unit of Y will not change the overall purchasing power of the consumer's income (option B). Therefore, both options A and B are valid at point A, making choice D the best answer. Option C cannot be determined from the given information.

In the Following Graph the Price of Y Is $50