Using the utility-optimizing model, which of the following would induce a consumer to increase consumption of good x, a normal good?
A) An increase in the marginal utility of x
B) A decrease in the total utility of y
C) An increase in the marginal utility of good y
D) A decrease in income

Question

Quizplus · Accepted Answer

According to the utility-optimizing model, consumers aim to maximize their total utility subject to their budget constraint. As good x is a normal good, an increase in income would lead to an increase in the quantity demanded of x at any given price. However, if income is held constant, an increase in the marginal utility of x would induce the consumer to consume more of it, as each additional unit of x would provide more satisfaction. Therefore, A is the correct choice. Option B is incorrect as a decrease in the total utility of y would not directly influence the consumption of x. Option C is incorrect as an increase in the marginal utility of y would potentially decrease the consumption of x. Option D is incorrect as a decrease in income would lead to a decrease in the quantity demanded of both x and y.

Using the Utility-Optimizing Model, Which of the Following Would Induce