The consumer's optimum is where
A)MUₓ/MUᵧ = Pᵧ/Pₓ
B)MUₓ/Pᵧ = MUᵧ/Pₓ
C)Pₓ/MUₓ = Pᵧ/MUᵧ
D)MUₓ/MUᵧ = Pₓ/Pᵧ

Name: The consumer's optimum is where A)MUₓ/MUᵧ = Pᵧ/Pₓ B)MUₓ/Pᵧ = MUᵧ/Pₓ C)Pₓ/MUₓ = Pᵧ/MUᵧ D)MUₓ/MUᵧ = Pₓ/Pᵧ
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Question

Quizplus · Accepted Answer

The consumer's optimum is achieved when the marginal rate of substitution (MUₓ/MUᵧ) equals the price ratio (Pₓ/Pᵧ), indicating that the consumer is maximizing utility given their budget constraint.

The Consumer's Optimum Is Where