Use the following to answer question:
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that the price of both goods is $1 per unit,that you consume three units of good X and three units of good Y,and that you are spending all of your income.To maximize utility,assuming that the goods are divisible,you would want to consume _____ of X and _____ of Y.
A)less;less
B)more;more
C)less;more
D)more;less

Question

Use the following to answer question: 
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that the price of both goods is $1 per unit,that you consume three units of good X and three units of good Y,and that you are spending all of your income.To maximize utility,assuming that the goods are divisible,you would want to consume _____ of X and _____ of Y.
A)less;less 
B)more;more 
C)less;more 
D)more;less

Quizplus · Accepted Answer

To maximize utility, the consumer should allocate their budget in such a way that the marginal utility per dollar spent on each good is equal. If the marginal utility of good X is higher than that of good Y for the last unit consumed, the consumer should consume more of X and less of Y until the marginal utility per dollar spent is equal for both goods.

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