Assume that an individual consumes two goods, X and Y. The total utility (assumed measurable) of each good is independent of the rate of consumption of other goods. The prices of X and Y are, respectively, $5 and $10. Given the above, if the consumer buys the third unit of Y,

A. the marginal utility of the third unit is 950 units of satisfaction.
B. the marginal utility per dollar spent on Y is 20.
C. the marginal utility per dollar spent on Y is 200.
D. both a and b.


Answer: B

Economics

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