Suppose That MU_x/P_x Exceeds MU_y/P_y

question 90

Multiple Choice

Suppose that MU_x/P_x exceeds MU_y/P_y.To maximize utility,the consumer who is spending all her money income should buy:

• A) less of X only if its price rises.
• B) more of Y only if its price rises.
• C) more of Y and less of X.
• D) more of X and less of Y.

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Definitions:

Extensive Form

In game theory, a detailed representation of a game that includes the order of players' moves, their choices at every node, and the outcomes resulting from each combination of choices, displayed as a decision tree.

Simultaneous Game

A strategic situation where each player must make their decisions at the same time, without knowledge of the other players' choices.

Positive-Sum Game

A situation in which all participants can gain or benefit in some way, contrasting with a zero-sum game.

Zero-Sum Game

A situation in economics or game theory where one party's gain is precisely balanced by another party's loss.