Economics (AS & A Level) · Oct / Nov 2024 · Paper 33 · Question 1
9708Utility
A rational consumer chooses what quantities of two products Y and Z to purchase with a given income. MU_Y and MU_Z are the additions to total utility that would result if the consumer were to purchase an additional unit of each product. P_Y and P_Z are the current prices of the two products. Which outcome would represent consumer equilibrium?
- Awhen MU_Y = MU_Z
- Bwhen MU_Y × P_Y = MU_Z × P_Z
- Cwhen MU_Y × P_Z = MU_Z × P_Y
- Dit is not possible to tell from the information available
As printed in the paper
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Correct answer: C. when MU_Y × P_Z = MU_Z × P_Y
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