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In a World with Only Two Goods X and Y,which

Question 71

Multiple Choice

In a world with only two goods X and Y,which of the following statements is NOT true when a consumer faces a corner solution and spends all of her income on good X?


A) The marginal utility per dollar spent on good X is greater than the marginal utility per dollar spent on good Y over the entire amount of her income.
B) For every consumption bundle on her budget line,the marginal utility of good X is greater than the marginal utility of good Y.
C) A sufficiently large decrease in the price of good Y,holding the price of good X constant,can result in an interior solution.
D) The marginal rate of substitution is not equal to the relative price ratio at the corner solution.

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