Multiple Choice
Suppose a consumer spends all his income.His marginal utility per dollar on X is 4 and marginal utility per dollar on Y is 2.We know that
A) utility can be increased by increasing the consumption of X and decreasing the consumption of Y.
B) utility can be increased by decreasing the consumption of X and increasing the consumption of Y.
C) the price of Y must be eight times the price of X.
D) utility is maximized.
E) the price of Y must be one-third the price of X.
Correct Answer:
Verified
Correct Answer:
Verified
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