Assume MU c and MU d represent the marginal utility that a consumer gets from products C and D, the respective prices of which are P_c and P_d. The consumer will increase his total utility from a specific money outlay by spending more on C and less on D if initially A)MU dMU dP d. D)MU dMU c.

Question

Assume MU c and MU d represent the marginal utility that a consumer gets from products C and D, the respective prices of which are P_c and P_d. The consumer will increase his total utility from a specific money outlay by spending more on C and less on D if initially A)MU dMU dP d. D)MU d>MU c.

Quizplus · Accepted Answer

The consumer will increase his total utility from a specific money outlay by spending more on product C and less on product D if the marginal utility per dollar spent on C is greater than the marginal utility per dollar spent on D, which is represented by $ \frac{MU_c}{P_c} > \frac{MU_d}{P_d} $.

Assume MU C and MU D Represent the Marginal Utility