Whenever a consumer purchases good X but not good Y,then: A) MRS_XY ≥ P_X/P_Y at the chosen bundle. B) MRS_XY ≤ P_X/P_Y at the chosen bundle. C) MRS_XY = P_X/P_Y at the chosen bundle. D) MRS_XY = - P_X/P_Y at the chosen bundle.

Question

Quizplus · Accepted Answer

When a consumer chooses good X over good Y, the marginal rate of substitution (MRS) of X for Y is greater than or equal to the price ratio, indicating a higher preference for X.

Whenever a Consumer Purchases Good X but Not Good Y,then