Given Two Goods,X and Y,and Their Prices,PX and PY a Consumer

question 37

Multiple Choice

Given two goods,X and Y,and their prices,PX and PY a consumer will maximize utility by allocating expenditures such that

• A) MUX/PY = MUY/PX.
• B) PY/MUX = PX/MUY.
• C) MUX/PX = MUY /PY.
• D) MUX = PX = MUY = PY = MU$.
• E) MUX = MUY = PX = PY = MU$.

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Definitions:

Settlement Price

The official price at the close of a trading session on a futures exchange, used for determining margin requirements and the next day's price limits.

Future Contract

A legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specific time in the future, reiterating the concept of futures contracts with a focus on its nature as a legal agreement.

Spot Price

The current market price at which a particular asset can be bought or sold for immediate delivery.

Oil

A natural resource used as a primary energy source and raw material in various industries, whose market dynamics significantly influence global economics.