Use the following to answer question(s): Consumer Equilibrium 3

-(Exhibit: Consumer Equilibrium 3) Assume that you are consuming the combination of goods at point G.Given budget constraint FL, utility can:
A) be increased by consuming more of good A and less of good B.
B) be increased by consuming less of good A and more of good B.
C) be increased by consuming more of both goods.
D) not be increased.

Question

Use the following to answer question(s): Consumer Equilibrium 3
 
-(Exhibit: Consumer Equilibrium 3) Assume that you are consuming the combination of goods at point G.Given budget constraint FL, utility can:
A) be increased by consuming more of good A and less of good B. 
B) be increased by consuming less of good A and more of good B. 
C) be increased by consuming more of both goods. 
D) not be increased.

Quizplus · Accepted Answer

At point G, the marginal utility per dollar spent on good B is higher than the marginal utility per dollar spent on good A. This implies that by consuming less of good A and more of good B, the consumer can increase their total utility while staying within the budget constraint FL. Therefore, option B is the best choice.

Use the Following to Answer Question(s): Consumer Equilibrium 3