Suppose you have a fixed amount of income to spend on two goods, X and Y. The price of good X is Px = $10, and the price of good Y is Py = $5. The marginal utility of X is MUx = 60 utils, and the marginal utility of Y is MUy = 15 utils. How should consumption of X and Y change, if at all, to increase utility?
What will be an ideal response?
Consumption of good X should increase, and consumption of good Y should decrease.
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