Use the following to answer questions:
-(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of good X is $5 per unit, the price of good Y is $1 per unit, and you have $10 to spend on both goods. To maximize utility, you would consume _____ unit(s) of X and _____ unit(s) of Y.
A) no; 1
B) 1; 5
C) 4; 6
D) 5; 5

Question

Use the following to answer questions: 
-(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of good X is $5 per unit, the price of good Y is $1 per unit, and you have $10 to spend on both goods. To maximize utility, you would consume _____ unit(s) of X and _____ unit(s) of Y.
A) no; 1 
B) 1; 5 
C) 4; 6 
D) 5; 5

Quizplus · Accepted Answer

To maximize utility, you should spend your budget such that the marginal utility per dollar spent on each good is equal. With $10, you can buy 1 unit of X ($5) and 5 units of Y ($5), maximizing utility given the prices.

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