Question

Joanna is deciding between consuming Good X and Good Y. At her current level of consumption,...

Joanna is deciding between consuming Good X and Good Y. At her current level of consumption, her marginal utility per dollar for Good X is greater than the marginal utility per dollar for Good Y. To achieve the consumer optimum, Joanna needs to:

consume more of Good Y until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X
consume more of Good X until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X.
consume more of both Good X and Good Y until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X.
consume more of Good X or less of Good Y until the marginal utility per dollar for Good X and Good Y is equal.
continue at her current level of consumption.

Homework Answers

Answer #1

Solution

Joanna is deciding between consuming Good X and Good Y. At her current level of consumption, her marginal utility per dollar for Good X is greater than the marginal utility per dollar for Good Y. To achieve the consumer optimum, Joanna needs to

consume more of Good X or less of Good Y until the marginal utility per dollar for Good X and Good Y is equal.

Option C.consume more of Good X or less of Good Y until the marginal utility per dollar for Good X and Good Y is equal. is Correct Option

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