A Utility-Maximizing Consumer Who Is Considering Two Goods, X and Y

question 19

Multiple Choice

A utility-maximizing consumer who is considering two goods, x and y, would allocate her budget in such a way that

• A)MU_x = MU_y
• B)MU_x > MU_y
• C)MU_x/P_x > MU_y/P_y
• D)MU_x/P_x = MU_y/P_y
• E)MU_x/P_x < MU_y/P_y

---

Definitions:

Credit Policy

A set of guidelines a company follows to determine credit terms for customers, including who is granted credit and the terms of payment.

Credit Sales

Transactions where goods or services are sold to a customer with the agreement that payment will be made at a later date.

Zero Balance Accounts

Bank accounts that maintain a balance of zero by automatically transferring funds to cover charges or replenishing from another account.

Concentration Banking

Employing one bank to manage the balances in remote accounts. Balances are generally swept into the concentration bank daily.