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The Utility Maximizing Rule States That "If MUX/PX = MUY/PY

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The utility maximizing rule states that "if MUX/PX = MUY/PY, then you're maximizing utility." Why is that so? How will the ratio of prices compare to the ratio of marginal utilities when you are maximizing your total satisfaction from a given amount of spending?


Definitions:

Chameleon Effect

The unconscious mimicry of the postures, mannerisms, facial expressions, and other behaviors of one's interaction partners, often facilitating social connection.

Psychology Professor

An academic or professional who teaches psychology and conducts research in the field of psychology at a college or university.

Normative Social Influence

The influence of other people that leads us to conform to be liked and accepted by them.

Chameleon Effect

The unintentional imitation of the body positions, gestures, facial expressions, and various behaviors of individuals one is interacting with.

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