The Tangency Condition for the Optimal Choice for a Consumer

question 4

Multiple Choice

The tangency condition for the optimal choice for a consumer is given by

• A) MRS_x,y = P_y/P_x
• B) MU_x/MU_y = 1
• C) MRS_x,y = P_x/P_y
• D) MU_x/MU_y = P_y/P_x

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Definitions:

Muscularis Externa

The layer of muscle in the gastrointestinal tract located outside the submucosa, responsible for the movements of peristalsis and segmentation.

Hepatopancreatic Duct

A duct that carries bile from the liver and pancreatic juice from the pancreas into the duodenum.

Common Bile Duct

A duct that carries bile from the liver and gallbladder to the duodenum, important in digestion.

Cystic Duct

The short duct that connects the gallbladder to the common bile duct, allowing bile to flow from the gallbladder into the small intestine.