If a Consumer Wishes to Maximize Satisfaction Given Limited Income

question 27

Multiple Choice

If a consumer wishes to maximize satisfaction given limited income and MU_x/P_x < MU_y/P_y then the consumer should:

• A) do nothing because she/he is in equilibrium.
• B) buy more of X and less of Y.
• C) buy more of Y and less of X.
• D) buy more of both X and Y.
• E) buy less of both X and Y.

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Definitions:

Corporation

A legal entity that is separate and distinct from its owners, who are shareholders, and is recognized as such by law with rights and liabilities that are distinct from those of its members.

Legal Entity

An organization or structure that has legal rights and obligations, including the ability to enter into contracts and sue or be sued.

Shareholders

Individuals or entities that own shares in a company, thus holding a portion of the company's ownership and sometimes entitled to dividends and a say in company decisions.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or project.