Answer this:

For the following questions, assume that good X is on the horizontal axis and good Y is on the vertical axis in the consumer-choice diagram. P_Xdenotes the price of good X, P_Yis the price of good Y, and I is the consumer's income. Unless otherwise stated, the consumer's preferences are assumed to satisfy the standard assumptions.

Refer to Goods X and Y. Suppose the consumer is at an optimum, spending all his income on good X. How are the marginal value of X and the relative price of X related at this corner solution?

Question 56 options:

1)

The marginal value of X and the relative price of X must be equal.

2)

The marginal value of X must be less than or equal to the relative price of X.

3)

The marginal value of X must be greater than or equal to the relative price of X.

4)

There is no definite relationship between the marginal value and the relative price of X.

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