Economics 9708 · AS & A Level · Utility and rational consumer behaviour

Utility and rational consumer behaviour — practice question

A consumer divides his spending among three goods, X, Y and Z. The table gives the consumer’s marginal utilities for these goods together with their prices. In what way should the consumer’s spending be redistributed so that utility is maximised?

  • AX less, Y less, Z more
  • BX less, Y more, Z more
  • CX more, Y less, Z less
  • DX more, Y more, Z less

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