If a Consumer Allocates Income Between Goods X and Y

question 15

Multiple Choice

If a consumer allocates income between goods x and y, consumer equilibrium occurs when

• A)the indifference curve farthest from the origin is reached
• B)MU_x/P_x = MU_y/P_y and the budget is exhausted
• C)marginal utility is maximized
• D)MU_x = MU_y for the last unit consumed of each good
• E)consumer surplus equals 0

---

Definitions:

Clayton Act

A U.S. antitrust law, enacted in 1914, aimed at promoting competition and preventing unfair business practices.

Competitive Firms

Companies that operate in a market structure characterized by a large number of sellers producing similar but slightly differentiated products, where no single seller has significant market power to determine prices.

Clayton Act

A United States antitrust law, enacted in 1914, designed to prevent anticompetitive practices and monopolies, enhancing the Sherman Antitrust Act.

Exclusive Dealer

An exclusive dealer is a distributor or seller who has been granted the sole rights to sell a manufacturer's products in a specific geographic area or market.