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Suppose a consumer spends all his income. His marginal utility per dollar on X is 4 and marginal utility per dollar on Y is 2.
Suppose a consumer spends all his income. His marginal utility per dollar on X is 4 and marginal utility per dollar on Y is 2. We know that
A. utility can be increased by increasing the consumption of X and decreasing the consumption of Y.
B. utility can be increased by decreasing the consumption of X and increasing the consumption of Y.
C. the price of Y must be eight times the price of X.
D. the price of Y must be one minus third the price of X.
E. utility is maximized.
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