1. Consider the following information for a consumer who is trying to allocate her income between goods X and Y so as to maximize utility. The price of X is $2 and the price of Y is $1 per unit. When all income is spent, the marginal utility of the last unit of X is 20 and the marginal utility of the last unit of Y is 16.

a)Why is the consumer not in equilibrium?

b) To increase utility, which good should this consumer consume more of and which less of?

2.What two conditions are met when a consumer in maximizing utility?