The MU/P Ratio for Good X Is the Same as for Good

question 130

Multiple Choice

The MU/P ratio for good X is the same as for good Y: 12 utils per dollar.If the price of good X rises to $2 from $1,a consumer who seeks (consumer) equilibrium will buy more of good __________ until the marginal utility of good __________ falls to __________ utils.

• A) Y; Y; 12
• B) X; X; 24
• C) Y; X; 12
• D) Y; Y; there is not enough information to answer this part of the question.
• E) X; X; there is not enough information to answer this part of the question.

Understand why demand is more elastic in the long run compared to the short run.

Understand the relationship between demand elasticity and expenditure on items, including luxuries versus necessities.

Understand the concept of cross-price elasticity of demand and how it influences consumer choices.

Comprehend the impact of income changes on demand elasticity for different products.

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