If the marginal utility per dollar spent on Good X exceeds that of Good Y,the utility-maximizing consumer should:
A) buy less of Good X and more of Good Y.
B) buy less of Good Y and more of Good X.
C) buy more of both Good X and Good Y.
D) buy less of both Good X and Good Y.

Question

Quizplus · Accepted Answer

If the marginal utility per dollar spent on Good X exceeds that of Good Y, it means that Good X provides more satisfaction than Good Y for each dollar spent. Therefore, the consumer should reallocate their spending towards Good X and away from Good Y in order to maximize their total utility. This involves buying less of Good Y and more of Good X.

If the Marginal Utility Per Dollar Spent on Good X