If MU_x/ P_x = MU_Y/ P_Y then _____. A)the consumer should purchase same quantity of X and Y. B)the consumer should purchase less X C)the consumer is maximizing utility D)the consumer should purchase more Y E)the consumer is minimizing utility

Question

Quizplus · Accepted Answer

The equation given represents the marginal utility per dollar spent on good X being equal to the marginal utility per dollar spent on good Y. This indicates that the consumer is maximizing utility, as they are deriving an equal level of satisfaction from each dollar spent on both X and Y. Therefore, there is no need to adjust the quantities purchased, and the consumer is already making optimal choices.

If MUx / Px = MUY / PY Then _____

If MU_x/ P_x = MU_Y/ P_Y Then _____