The maximum quantity of good X that is affordable is: A) M/P_Y. B) M/X. C) M/P_X. D) P_YY.

Question

Quizplus · Accepted Answer

The maximum quantity of good X that can be afforded is given by the formula M/(P_X.). This is because the maximum quantity is dependent on the budget (M) and the price of good X (PX), as well as the prices of other goods (P), the individual's utility for those goods (U), and their budget constraint (B). Choice A and D are incorrect because they do not include the specific price and utility values for good X. Choice B is incorrect because it does not take into account the prices and utility values for the other goods in the individual's consumption bundle.

The Maximum Quantity of Good X That Is Affordable Is