Suppose a consumer is spending all of his/her income on two goods, A and B, in a manner where MUa = 15 and MUb = 80, and the Pa = $5 and the Pb = $20. Then the consumer:
A) is maximizing his/her utility.
B) should increase his/her purchases of B and decrease the purchases of A.
C) should spend more money on both goods.
D) should spend less money on both goods.
E) should increase the purchases of A and decrease the purchases of B.
Correct Answer:
Verified
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