Suppose a Consumer Has Preferences Over Two Goods, X and Y

question 262

Multiple Choice

Suppose a consumer has preferences over two goods, X and Y, which are perfect substitutes. In particular, two units of X is equivalent to one unit of Y. If the price of X is $1, the price of Y is $3, and the consumer has $30 of income to allocate to these two goods, how much of each good should the consumer purchase to maximize satisfaction?

• A)30 units of X and 0 units of Y
• B)0 units of X and 10 units of Y
• C)15 units of X and 5 units of Y
• D)15 units of X and 0 units of Y

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