A way to describe the consumer's optimum other than "the marginal rate of substitution for two goods is equal to their relative price ratio",is
A)MUₓ/MUᵧ = Pᵧ/Pₓ.
B)MUₓ/Pᵧ = MUᵧ/Pₓ.
C)MUₓ/Pₓ = MUᵧ/Pᵧ.
D)MUᵧ/MUₓ = Pₓ/Pᵧ.

Question

Quizplus · Accepted Answer

The consumer's optimum occurs where the marginal utility per dollar spent on one good is equal to the marginal utility per dollar spent on the other good. This can be expressed as MUₓ/Pₓ = MUᵧ/Pᵧ. Option C is the only choice that matches this description.

A Way to Describe the Consumer's Optimum Other Than "The