If a Consumer Purchases a Combination of Commodities X and Y

question 54

Multiple Choice

If a consumer purchases a combination of commodities x and y such that MUₓ/Pₓ = 20 and MUᵧ/Pᵧ = 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:

Risk-free Rate

The theoretical return on an investment with zero risk, often represented by the yield on government securities like U.S. Treasury bills.

Real Estate

Property consisting of land or buildings, and anything affixed to the land, that has economic value.

Mutual Fund Shares

Units of ownership in a mutual fund, offering investors a proportionate stake in the fund's portfolio and its income.

Debt Securities

Bonds; also called fixed-income securities.