Which of the Following Equations Corresponds to an Optimal Choice

question 495

Multiple Choice

Which of the following equations corresponds to an optimal choice point? (i)
MRS = P_X/P_Y
(ii)
MU_X/MU_Y = P_X/P_Y
(iii)
MU_X/P_X = MU_Y/P_Y
(iv)
MU_X/P_Y = MU_Y/P_X

• A)(i) only
• B)(i), (ii), and (iii) only
• C)(ii) and (iv) only
• D)(i), (ii), (iii), and (iv)

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Definitions:

Store Brand

Products marketed and sold under a retail store's brand name, often positioned as lower-cost alternatives to national brands.

Income Effect

The change in an individual's or economy's consumption choices as income increases or decreases.

Price Elastic

The responsiveness of the demand for a product or service to changes in its price, affecting sales volume and revenue.

Quantity Demand

The total amount of a product or service that consumers are willing to purchase at a given price over a specified period.