Use the following to answer question:
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that goods X and Y both cost $1 per unit and you have $7 to spend on both goods.To maximize utility,you would consume _____ units of X and _____ units of Y.
A)2;5
B)3;4
C)4;3
D)5;2

Question

Use the following to answer question: 
-(Table: Consumer Equilibrium)Use Table: Consumer Equilibrium.Assume that goods X and Y both cost $1 per unit and you have $7 to spend on both goods.To maximize utility,you would consume _____ units of X and _____ units of Y.
A)2;5 
B)3;4 
C)4;3 
D)5;2

Quizplus · Accepted Answer

To maximize utility, the consumer should consume goods in such a way that the marginal utility per dollar spent is equal across all goods. Without the specific table data, the general principle is to adjust consumption until MUx/Px = MUy/Py, where MU is marginal utility and P is price. Given both goods cost $1, it's about equalizing the marginal utilities. Without specific utility data, we can't calculate the exact numbers, but choice C (4 units of X and 3 units of Y) is presented as the correct answer based on the assumption that it achieves this balance with a total cost of $7.

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