Suppose That the Ratio of Marginal Utility to Price for Good

question 46

Multiple Choice

Suppose that the ratio of marginal utility to price for good A is 10, and the ratio of marginal utility to price for good B is 5. Assume that for her current consumption of goods A and B the consumer is experiencing diminishing marginal utility for each good. In order for this consumer to be at her utility maximizing point, she should

• A) consume less A and more B .
• B) consume more A and less B .
• C) consume more A and more B .
• D) do nothing - the consumer is already in equilibrium.

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