Solved

Suppose That the Ratio of Marginal Utility to Price for Good

Question 64

Multiple Choice

Suppose that the ratio of marginal utility to price for good AA is 10 , and the ratio of marginal utility to price for good BB is 5 . Assume that for her current consumption of goods AA and BB the consumer is experiencing diminishing marginal utility for each good. In order for this consumer to be at her utility maximizing point, she should:


A) consume less AA and more BB .
B) consume more AA and less BB .
C) consume more AA and more BB .
D) do nothing - the consumer is already in equilibrium.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions