Which of the following equations corresponds to an optimal choice point?
(i)MRS = PX/PY
(ii)MUX/MUY = PX/PY
(iii)MUX/PX = MUY/PY
(iv)MUX/PY = MUY/PX
A) (i) only
B) (i), (ii), and (iii) only
C) (ii) and (iv) only
D) (i), (ii), (iii), and (iv)

Question

Quizplus · Accepted Answer

The optimal choice point in consumer theory is where the marginal rate of substitution (MRS) equals the price ratio (PX/PY), which is represented by equations (i), (ii), and (iii).

Which of the Following Equations Corresponds to an Optimal Choice