In the diagram, suppose the consumer is currently exhausting his or her income at a point where the marginal rate of substitution of apples for oranges is greater than ⁵/₄. That is, MUA/MU0⁵/₄. To maximize utility, the consumer should move from point A)a to e. B)b to e. C)c to e. D)d to e.

Question

In the diagram, suppose the consumer is currently exhausting his or her income at a point where the marginal rate of substitution of apples for oranges is greater than ⁵/₄. That is, MUA/MU0>⁵/₄. To maximize utility, the consumer should move from point A)a to e. B)b to e. C)c to e. D)d to e.

Quizplus · Accepted Answer

The Answer of In the diagram, suppose the consumer is currently exhausting his or her income at a point where the marginal rate of substitution of apples for oranges is greater than ⁵/₄. That is, MUA/MU0>⁵/₄. To maximize utility, the consumer should move from point A)a to e. B)b to e. C)c to e. D)d to e.

In the Diagram, Suppose the Consumer Is Currently Exhausting His