Use the following for questions 61-69.

-(Exhibit: Consumer Equilibrium 1) Assume that the price of good X is $2 per unit, the price of good Y is $1 per unit, and you have $10 of income to spend on both goods.To maximize utility, you would consume _______ units of X and _______ units of Y.
A) 3; 4
B) 4; 3
C) 4; 6
D) 5; 5

Question

Use the following for questions 61-69.
  
-(Exhibit: Consumer Equilibrium 1) Assume that the price of good X is $2 per unit, the price of good Y is $1 per unit, and you have $10 of income to spend on both goods.To maximize utility, you would consume _______ units of X and _______ units of Y.
A) 3; 4 
B) 4; 3 
C) 4; 6 
D) 5; 5

Quizplus · Accepted Answer

The correct answer is A because the consumer will consume 3 units of X and 4 units of Y to maximize utility. This is because the marginal utility per dollar spent on good X is equal to the marginal utility per dollar spent on good Y at this consumption level.

Use the Following for Questions 61-69