If the price of X is $3 and the price of Y is $5, then, in a consumer optimum,
A) the quantity purchased of Y must be 60 percent of the quantity of X purchased.
B) the quantity purchased of Y must be 67 percent of the quantity of X purchased.
C) the marginal utility of Y must be 67 percent more than the marginal utility of X.
D) the marginal utility of X must equal 3 and the marginal utility of Y must equal 5.

Question

Quizplus · Accepted Answer

In consumer optimum, the marginal utility per dollar spent on each good should be equal. Therefore, the marginal utility of Y divided by its price ($5) should equal the marginal utility of X divided by its price ($3). This implies the marginal utility of Y must be 67% more than the marginal utility of X to balance the higher price.

If the Price of X Is $3 and the Price