Sanjay is consuming X and Y so that he is spending his entire income and MUx/Px = 8 and MUy/Py = 14. To maximize utility, he should consume
A. the same amount of X and Y since he is already maximizing utility.
B. less X and more Y.
C. less of both X and Y.
D. more X and less Y.
Answer: B
You might also like to view...
Which of the following is a reason why we should consider the federal national debt a problem?
A) If the debt was incurred to finance research and development, crowding out will occur. B) If the debt drives up interest rates, crowding out will occur. C) The federal government is in danger of defaulting on its debt. D) If the debt was incurred to finance improvements in infrastructure, crowding out will occur.
Assume that all of the inputs used in a particular perfectly competitive industry can be increased without bidding up their prices. The long run supply curve for that industry will be: a. vertical
b. upward sloping. c. horizontal. d. downward sloping.