If a consumer is initially at an optimum,and then the price of Y increases,then A) $MU _ { X }$ / $\mathrm { P } _ { \mathrm { X } }$ $MU _ { Y }$ / $P _ { Y }$ . C) $MU _ { X }$ / $\mathrm { P } _ { \mathrm { X } }$ = $MU _ { Y }$ / $P _ { Y }$ . D) $MU _ { X }$ / $MU _ { Y }$ $P _ { Y }$ / $\mathrm { P } _ { \mathrm { X } }$ .

Question

If a consumer is initially at an optimum,and then the price of Y increases,then
A) $MU _ { X }$ /
$\mathrm { P } _ { \mathrm { X } }$ <
$MU _ { Y }$ /
$P _ { Y }$ .
B) $MU _ { X }$ /
$\mathrm { P } _ { \mathrm { X } }$ >
$MU _ { Y }$ /
$P _ { Y }$ .
C) $MU _ { X }$ /
$\mathrm { P } _ { \mathrm { X } }$ =
$MU _ { Y }$ /
$P _ { Y }$ .
D) $MU _ { X }$ /
$MU _ { Y }$ >
$P _ { Y }$ /
$\mathrm { P } _ { \mathrm { X } }$ .

Quizplus · Accepted Answer

When the price of Y increases, the marginal utility per dollar spent on Y decreases, making the marginal utility per dollar spent on X greater than that on Y.

If a Consumer Is Initially at an Optimum,and Then the Price