When there is a difference between the MU_x/P_x and the MU_y/P_y, we expect that a consumer will: A) continue to purchase the quantities generating this outcome. B) buy more of good x. C) buy more of good y. D) change the quantities of good x and y in their current purchase basket.

Question

Quizplus · Accepted Answer

If there is a difference between the MU_x/P_x and the MU_y/P_y, it implies that the two goods are not perfect substitutes or complements. Therefore, a consumer may need to adjust the quantities of x and y in their current purchase basket to optimize their utility. Hence, option D is the best choice.

When There Is a Difference Between the MUx/Px and the MUy/Py

When There Is a Difference Between the MU_x/P_x and the MU_y/P_y