Suppose the price of is $20,the price of is $10,and that the consumer is currently spending all available income.At the consumer's current consumption basket the marginal utility of is 8 and the marginal utility of is 4.
A) The consumer is currently maximizing utility.
B) The consumer could increase utility by consuming more of good and less of good
C) The consumer could increase utility by consuming more of good and less of good .
D) Nothing can be said about the consumer's utility because we do not know the consumer's income or utility function.
Correct Answer:
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