Multiple Choice
A consumer has the indifference map shown below.The market prices of X and Y are $20 and $50,respectively.The consumer has $500 to spend on goods X and Y.The utility-maximizing bundle ________ (is,is not) a corner solution because __________________.
A) is; the consumer spends all income on good X to buy 25 units of X.
B) is; the consumer spends all income on good Y to buy 37.5 units of Y.
C) is not; the consumer buys 5 units of X and 20 units of Y.
D) is not; MRS equals the slope of the budget line.
E) is not; MRS does not equal the slope of the budget line.
Correct Answer:

Verified
Correct Answer:
Verified
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