The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3 -Assume that a consumer purchases a combination of products X and Y and MU_x / P_x = 75 utils per dollar and MU_y / P_y = 50 utils per dollar. To maximize utility without spending more dollars, the consumer should buy: A)more of both X and Y. B)less of Y only if the price of Y increases. C)more of Y and less of X. D)more of X and less of Y. E)less of both X and Y.

Question

Quizplus · Accepted Answer

Since the MUs/Ps ratio for product X (75) is higher than for product Y (50), the consumer should buy more of X and less of Y to maximize utility without spending more dollars. Therefore, choice D is the correct answer.

The Below Table Shows the Average Utility (In Utils) Obtained