Use the following to answer question:
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that the price of both goods is $1 per unit,that you consume four units of good X and two units of good Y,and that you are spending all of your income.To maximize utility,assuming that the goods are divisible,you would consume _____ of X and _____ of Y.
A)less;more
B)more;more
C)less;less
D)more;less

Question

Use the following to answer question: 
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that the price of both goods is $1 per unit,that you consume four units of good X and two units of good Y,and that you are spending all of your income.To maximize utility,assuming that the goods are divisible,you would consume _____ of X and _____ of Y.
A)less;more 
B)more;more 
C)less;less 
D)more;less

Quizplus · Accepted Answer

To maximize utility, the consumer should adjust their consumption to equalize the marginal utility per dollar spent on each good. If the consumer is currently consuming four units of good X and two units of good Y, and assuming the marginal utility of good Y is higher than that of good X for the next unit (since the price is the same for both goods), the consumer should consume less of X and more of Y to reach the point where the marginal utility per dollar is equal for both goods. This adjustment will lead to an increase in overall utility.

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