Jon is consuming X and Y so that he is spending his entire income and MU_x/P_x = 4 and MU_y/P_y = 4. To maximize utility, he should consume

A) the same amount of X and Y since he is already maximizing utility.
B) less of both X and Y.
C) more X and less Y.
D) less X and more Y.

Question

Tiffany Francois · Accepted Answer

Final Answer : A, Explanation :  Jon is already maximizing his utility because the marginal utility per dollar spent on both goods X and Y is equal, which is a condition for utility maximization according to consumer theory.

Jon is consuming X and Y so that he is spending his entire income and MU_x/P_x = 4 and MU_y/P_y = 4. To maximize utility, he should consume

A) the same amount of X and Y since he is already maximizing utility.
B) less of both X and Y.
C) more X and less Y.
D) less X and more Y.

Definitions

Learning Objectives

Learning Objectives

Related questions

Jon is consuming X and Y so that he is spending his entire income and MUx/Px = 4 and MUy/Py = 4. To maximize utility, he should consumeA) the same amount of X and Y since he is already maximizing utility.B) less of both X and Y.C) more X and less Y.D) less X and more Y.

Definitions

Learning Objectives

Learning Objectives

Related questions

Jon is consuming X and Y so that he is spending his entire income and MU_x/P_x = 4 and MU_y/P_y = 4. To maximize utility, he should consume

A) the same amount of X and Y since he is already maximizing utility.
B) less of both X and Y.
C) more X and less Y.
D) less X and more Y.