The consumer's optimal consumption of X and Y is characterized by: A) (MU_X)(MU_Y) = P_XP_Y. B) MU_X = P_X. C) MU_X / MU_Y = P_Y / P_X. D) MU_X / P_Y = MU_X / P_X. E) MU_X / MU_Y = P_X / P_Y.

Question

Quizplus · Accepted Answer

The consumer's optimal consumption of goods X and Y is determined by the equality of the marginal utility per dollar spent on each good, which is correctly represented in option E.

The Consumer's Optimal Consumption of X and Y Is Characterized