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Economics (AS & A Level) · Oct / Nov 2022 · Paper 31 · Question 4

9708Utility

What is a correct statement of the equi-marginal utility rule?

  1. AThe marginal utility of X must equal the marginal utility of Y.
  2. BThe marginal utility of X divided by the price of X must equal the marginal utility of Y divided by the price of Y.
  3. CThe marginal utility of X divided by the price of Y must equal the marginal utility of Y divided by the price of Y.
  4. DThe price of X must equal the price of Y.

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Correct answer: B. The marginal utility of X divided by the price of X must equal the marginal utility of Y divided by the price of Y.

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