If MU x /P x exceeds MU y /P y , then a household can increase its utility by spending more on Y and less on X.

Question

If MU x /P x  exceeds MU y /P y , then a household can increase its utility by spending more on Y and less on X.

Khash Yousefi · Accepted Answer

Final Answer : False, Explanation :  The given expression suggests that the marginal utility per dollar spent on X (MU x ) is greater than the marginal utility per dollar spent on Y (MU y ). To increase utility, a household should spend more on X and less on Y, not the other way around.

If MU_x/P_x exceeds MU_y/P_y, then a household can increase its utility by spending more on Y and less on X.

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Learning Objectives

Learning Objectives

Related questions

If MUx/Px exceeds MUy/Py, then a household can increase its utility by spending more on Y and less on X.

Definitions

Learning Objectives

Learning Objectives

Related questions

If MU_x/P_x exceeds MU_y/P_y, then a household can increase its utility by spending more on Y and less on X.