Given a set amount of money, goods A and B both give the same marginal utility at current levels of consumption but good A costs twice as much as good B. You should:
A) consume more of good A and less of good B.
B) consume more of good B and less of good A.
C) keep consuming the current amounts of both good A and good B.
D) realize that you don't have enough information to answer the question.

Question

Quizplus · Accepted Answer

Since good A costs twice as much as good B but provides the same marginal utility, you should consume more of good B to maximize utility per dollar spent.

Given a Set Amount of Money, Goods a and B