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Author Question: If MUa/Pa is greater than MUb/Pb, and the consumer is consuming both goods, the consumer is not ... (Read 40 times)

CQXA

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on: Jul 1, 2018
If MUa/Pa is greater than MUb/Pb, and the consumer is consuming both goods, the consumer is not maximizing utility. True or false. Explain.
 
  What will be an ideal response?

Question 2

Refer to Scenario 2.1. If P = 15, which of the following is true?
 
  A) Quantity supplied is greater than quantity demanded.
  B) Quantity supplied is less than quantity demanded.
  C) Quantity supplied equals quantity demanded.
  D) There is a surplus.


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irishcancer18

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Reply #1 on: Jul 1, 2018
Answer to Question 1

True, when the consumer has maximized utility, the marginal utility per dollar spent on each good purchased will be equal, and the consumer will be on her budget line. In this case, the consumer should consume more a and less b.

Answer to Question 2

B


CQXA

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Reply 2 on: Jul 1, 2018
Thanks for the timely response, appreciate it

strudel15

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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