Answer to Question #47971 in Microeconomics for Julia

Question

At the consumer's current bundle, the indifference curve is steeper than the budget constraint. At this bundle:
A: the marginal utility per dollar spent on good X is greater than the marginal utility per dollar spent on good Y.
B: the consumer could increase utility by purchasing more Y and less X.
C: the consumer's utility is maximized.
D: the marginal utility per dollar spent on good X equals the marginal utility per dollar spent on good Y.

Answer 1

The fact that indifference curve is steeper than her budget line tells us that the exchange rate of the two goods differs from the rate the market asks.
So, the right answer is B: the consumer could increase utility by purchasing more Y and less X.