Arturo and Belen consume only two goods, X and Y.They have strictly convex preferences and no kinks in their indifference curves.At the initial allocation, the ratio of Arturo's marginal utility of X to his marginal utility of Y is A and the ratio of Belen's marginal utility of X to his marginal utility of Y is B, where A < B.The competitive equilibrium price ratio is p_x/p_y = C.

A) C > B
B) C < A.
C) C = A.
D) C = B.
E) A < C < B.

Strictly Convex Preferences

Preferences that demonstrate a consumer's increasing marginal rate of substitution, indicating a strong preference for diversified bundles of goods over homogeneous bundles.

Indifference Curves

Graphs representing different bundles of goods between which a consumer is indifferent, showing the combinations of goods that provide the same level of utility to the consumer.

Marginal Utility

The additional satisfaction or utility a consumer gains from consuming one more unit of a good or service.