Suppose That a Consumer Purchases a Combination of X and Y

question 91

Multiple Choice

Suppose that a consumer purchases a combination of X and Y such that MUX/PX = 15 utils per dollar and MUY /PY = 10 utils per dollar.To maximize utility,the consumer should buy

• A) less of X and more of Y.
• B) more of X and less of Y.
• C) more of both X and Y.
• D) less of both X and Y.
• E) neither X nor Y.

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Definitions:

Merchandising Company

A Merchandising Company is a business that purchases finished products and sells them at a profit, without altering the products themselves.

Cost Structure

The composition of a company’s costs, including fixed and variable costs, which impacts its profitability and pricing strategy.

Variable

A variable is an element, feature, or factor that is liable to vary or change; in business, it often refers to costs that fluctuate with the level of production or sales.

Fixed

Pertains to costs that remain constant regardless of the level of production or sales, such as rent, salaries, and insurance.