If MU_x/P_x < MU_y/P_y, Then

question 5

Multiple Choice

If MU_x/P_x < MU_y/P_y, then

• A) spending a dollar less on Y and a dollar more on X increases utility.
• B) spending a dollar less on X and a dollar more on Y increases utility.
• C) X is more expensive than Y.
• D) Y is more expensive than X.

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Definitions:

Product Promotion

The process of marketing and advertising a product to increase awareness and sales.

Marginal Revenue

The increase in revenue resulting from the sale of one additional unit of a product or service.

Profit-Maximizing

The strategy used by a business to find the optimal price and quantity of production for maximum profit.

Demand Schedule

A table that shows the quantity of goods or services that consumers are willing and able to purchase at various prices.