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    Exam 19: The Logic of Individual Choice: the Foundation of Supply and Demand
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    The Utility Maximizing Rule States That "If MU<sub>X</sub>/P<sub>X</sub> = MU<sub>Y</sub>/P<sub>Y</sub>
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The Utility Maximizing Rule States That "If MUX/PX = MUY/PY

Question 3

Question 3

Essay

The utility maximizing rule states that "if MUX/PX = MUY/PY, then you're maximizing utility." Why is that so? How will the ratio of prices compare to the ratio of marginal utilities when you are maximizing your total satisfaction from a given amount of spending?

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