The equilibrium condition for consumer behavior pertaining to goods A and B is __________. A) (MU_B/P_A) = (MU_A/P_B) B) MU_B = MU_A C) (MPP_B/MPP_A) = (P_B/P_A) D) (MU_B/MU_A) = (P_B/P_A)

Question

Quizplus · Accepted Answer

The equilibrium condition for consumer behavior, according to the theory of consumer choice, is that the ratio of the marginal utility of goods (MUS) to their prices (PS) should be equal across all goods. This is represented by the equation (MUS of good B / MUS of good A) = (Price of good B / Price of good A), which matches choice D.

The Equilibrium Condition for Consumer Behavior Pertaining to Goods a and B