Jon is consuming X and Y so that he is spending his entire income and MUx/Px = 4 and MUy/Py = 4. To maximize utility, he should consume
A) the same amount of X and Y since he is already maximizing utility.
B) less of both X and Y.
C) more X and less Y.
D) less X and more Y.

Question

Quizplus · Accepted Answer

Jon is already maximizing utility because the marginal utility per dollar spent on both goods X and Y is equal (MUx/Px = MUy/Py = 4).

Jon Is Consuming X and Y So That He Is