Use the following to answer questions:
-(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of both goods is $1 per unit, that you consume four units of good X and two units of good Y, and that you are spending all of your income. To maximize utility, assuming that the goods are divisible, you would consume _____ of X and _____ of Y.
A) less; more
B) more; more
C) less; less
D) more; less

Question

Use the following to answer questions: 
-(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of both goods is $1 per unit, that you consume four units of good X and two units of good Y, and that you are spending all of your income. To maximize utility, assuming that the goods are divisible, you would consume _____ of X and _____ of Y.
A) less; more 
B) more; more 
C) less; less 
D) more; less

Quizplus · Accepted Answer

To maximize utility, the marginal utility per dollar spent on each good should be equal. If consuming four units of X and two units of Y does not equalize the marginal utility per dollar, you should adjust consumption by consuming less of X and more of Y.

Use the Following to Answer Questions