Answer to Question #201226 in Microeconomics for Ahmad

Question

Assume the marginal utility of good X is 10, the price of X is $5, the marginal utility of good Y is 25, and the price of Y is $25. What should the consumer do to maximize his/her utility?

Buy more X and less Y.

Answer 1

The consumer should buy more X and less Y since his satisfaction is double unlike when he buys good Y.