Which of the following represents a consumer's optimum?
A) MUx/MUy = Py/Px
B) MUx/Py = MUy/Px
C) MUx/Px = MUy/Py
D) MUy/MUx = Px/Py

Question

Quizplus · Accepted Answer

The consumer's optimum is where the marginal utility per dollar (MU/P) is equal for both goods. In other words, the consumer should spend their money in such a way that the ratio of the marginal utility of each good to its price is equal. Therefore, option C (MUx/Px = MUy/Py) represents the equilibrium condition where the consumer’s optimum is reached.

Which of the Following Represents a Consumer's Optimum