Asked by
Arslan Salikhov
on Dec 19, 2024
Verified
Suppose that MU x/ Pₓ exceeds MU y/ Pᵧ . To maximize utility, the consumer who is spending all her money income should buy
A) less of X only if its price rises.
B) more of Y only if its price rises.
C) more of Y and/or less of X.
D) more of X and/or less of Y.
MU/P Ratio
A term not widely recognized or may be misinterpreted without context; likely refers to the marginal utility to price ratio, assessing the consumer satisfaction per unit of currency spent.
Utility Maximization
An economic principle where individuals or institutions make choices to achieve the highest satisfaction or benefit from their resources.
- Evaluate the impact of alterations in marginal utility on the balance of consumer behavior.
- Highlight the conditions that allow consumers to achieve their highest utility.
- Understand the implications of price changes on marginal utility and consumer choices.
Verified Answer
PM
Learning Objectives
- Evaluate the impact of alterations in marginal utility on the balance of consumer behavior.
- Highlight the conditions that allow consumers to achieve their highest utility.
- Understand the implications of price changes on marginal utility and consumer choices.
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