If a Consumer Purchases a Combination of Commodities X and Y

question 29

Multiple Choice

If a consumer purchases a combination of commodities x and y such that MU_x/P_x = 20 and MU_y/P_y = 10, to maximize utility, the consumers should buy.

• A) less of x and more of y.
• B) more of x and less of y.
• C) more of both x and y.
• D) less of both x and y.

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Definitions:

Marginal Benefit

The additional satisfaction or utility received by consuming one more unit of a good or service.

Additional Slice

A term that can refer to an extra serving or portion of a good or product beyond what is normally consumed.

Marginal Benefits

The additional satisfaction or utility that a person gains from consuming an additional unit of a good or service.

Marginal Costs

The cost added by producing one additional unit of a product or service.