The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3

-Suppose that apples and bananas both cost the same, but the marginal utility of bananas is twice as high as that for apples. The consumer should purchase more bananas and fewer apples in order to maximize utility.

Question

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3
 
-Suppose that apples and bananas both cost the same, but the marginal utility of bananas is twice as high as that for apples. The consumer should purchase more bananas and fewer apples in order to maximize utility.

Quizplus · Accepted Answer

If the marginal utility of bananas is twice as high as that for apples and both cost the same, then the consumer should purchase more bananas and fewer apples to maximize their utility based on the law of diminishing marginal utility. As the consumer consumes more apples, the marginal utility of each additional apple will decrease faster than the marginal utility of each additional banana. Therefore, the consumer will have higher overall utility by shifting their consumption towards bananas.

The Below Figure Shows the Various Combinations of the Goods