If MU_x/P_x exceeds MU_y/P_y, then a household can increase its utility by spending more on Y and less on X.

Name: If MU x /P x exceeds MU y /P y , then a household can increase its utility by spending more on Y and less on X.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The given expression suggests that the marginal utility per dollar spent on X (MU_x) is greater than the marginal utility per dollar spent on Y (MU_y). To increase utility, a household should spend more on X and less on Y, not the other way around.

If MUx/Px Exceeds MUy/Py, Then a Household Can Increase Its

If MU_x/P_x Exceeds MU_y/P_y, Then a Household Can Increase Its