Refer to the figure below. If the price of Good A is $2 and the price of Good B is $6, then the rational spending rule is satisfies when the consumer purchases ______ units of Good A and ______ units of Good B. $$\begin{array} { | c | c | c | }
\hline \text { Units } & \begin{array} { c }
\text { Marginal Utility } \
\text { of Good A }
\end{array} & \begin{array} { c }
\text { Marginal Utility } \
\text { of Good B }
\end{array} \
\hline 1 & 30 & 40 \
\hline 2 & 27 & 33 \
\hline 3 & 15 & 24 \
\hline 4 & 8 & 14 \
\hline
\end{array}$$
A)1; 1
B)2; 1
C)4; 3
D)3; 2

Question

Refer to the figure below. If the price of Good A is $2 and the price of Good B is $6, then the rational spending rule is satisfies when the consumer purchases ______ units of Good A and ______ units of Good B. $$\begin{array} { | c | c | c | } 
\hline \text { Units } & \begin{array} { c } 
\text { Marginal Utility } \
\text { of Good A }
\end{array} & \begin{array} { c } 
\text { Marginal Utility } \
\text { of Good B }
\end{array} \
\hline 1 & 30 & 40 \
\hline 2 & 27 & 33 \
\hline 3 & 15 & 24 \
\hline 4 & 8 & 14 \
\hline
\end{array}$$
A)1; 1
B)2; 1
C)4; 3
D)3; 2

Quizplus · Accepted Answer

To satisfy the rational spending rule, the consumer should allocate their spending in such a way that the marginal utility per dollar spent on each good is equal. This occurs where the marginal utility per dollar spent on Good A equals the marginal utility per dollar spent on Good B. 
At a price of $2 for Good A, the marginal utility per dollar spent on each unit of Good A is 30/2 = 15. 
At a price of $6 for Good B, the marginal utility per dollar spent on each unit of Good B is 24/6 = 4. 
Therefore, the consumer should purchase more units of Good B to equalize the marginal utility per dollar spent on each good. 
To do this, the consumer should purchase 3 units of Good B (for a total cost of $18) and 4 units of Good A (for a total cost of $8). 
The marginal utility per dollar spent on each good would then be: 
- Good A: 8/30 = 0.27 
- Good B: 24/18 = 1.33 
These values are approximately equal, satisfying the rational spending rule.

Refer to the Figure Below A)1; 1 B)2; 1 C)4; 3 D)3; 2

Refer to the Figure Below A)1; 1
B)2; 1
C)4; 3
D)3; 2