contestada

Alex has allocated his income in such a way that the marginal utility of the last unit of product X he consumes is 40 utils and that of the last unit of Y is 16 utils. If the unit price of X is $5, then the price of Y must beA. $1 per unit.B. $2 per unit.C. $3 per unit.D. $4 per unit.

Respuesta :

Answer:

B. $2 per unit

Explanation:

The computation of the price of Y is shown below:

As we know that the condition of the  utility maximization i.e ratio of Marginal utility and the price should be matched and equal for both the goods given in the question

For one good

= Marginal utility ÷ price

=  40 ÷ $5

= 8

And, for the other goods

Marginal utility ÷ price = 8

16 ÷ Price = 8

So, the price is $2 per unit

Hence, the correct option is B.

Otras preguntas