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

Utility and rational consumer behaviour — practice question

A rational consumer decides how many units of the two products Y and Z to buy using a fixed income. MUY and MUZ show the extra total utility that would arise if the consumer bought one more unit of each product. PY and PZ are the present prices of the two products. Which result would indicate consumer equilibrium?

  • Awhen MUY = MUZ
  • Bwhen MUY × PY = MUZ × PZ
  • Cwhen MUY × PZ = MUZ × PY
  • Dit is not possible to tell from the information available

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