Suppose Jane has chosen a combination of two goods, A and B, such that MU/P of good A is 10 (MU_A/P_A = 10), and the MU/P of good B is 10 (MU_B/P_B = 10). To increase utility with the same amount of money, Jane should: A) increase the number of B consumed. B) increase the number of A consumed. C) increase the number of A and B consumed. D) do nothing; she cannot increase utility with the same amount of money.

Question

Quizplus · Accepted Answer

Jane is already maximizing her utility given her budget because the marginal utility per dollar spent is equal for both goods A and B.

Suppose Jane Has Chosen a Combination of Two Goods, a and B