If the MU/P ratio for good X is less than the MU/P ratio for good Y, this means that
A)an individual is receiving more utility per dollar from good Y than good X.
B)the price of good X is lower than the price of good Y.
C)the price of good Y is lower than the price of good X.
D)the MU of good X is lower than the MU of good Y.
E)none of the above

Question

Quizplus · Accepted Answer

The MU/P ratio represents the marginal utility per dollar spent on a good. If the MU/P ratio for good X is less than that for good Y, it means the consumer is getting more utility for each dollar spent on good Y compared to good X, indicating a more efficient allocation of their budget towards good Y.

If the MU/P Ratio for Good X Is Less Than