Jon Is Consuming X and Y So That He Is

question 43

Multiple Choice

Jon is consuming X and Y so that he is spending his entire income and MUx/Px = 8 and MUy/Py = 4. To maximize utility, he should consume

• A) the same amount of X and Y since he is already maximizing utility.
• B) less of both X and Y.
• C) more X and less Y.
• D) less X and more Y.

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Definitions:

Characteristics

Distinctive or identifying features or qualities of a person, object, or phenomenon.

Hypotheses

Proposed explanations made on the basis of limited evidence as starting points for further investigation.

Theory

A system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained.

Nondirectional Research Hypothesis

A hypothesis that predicts a relationship or effect but does not specify the direction of the relationship.