Learning Path
Question & Answer
Choose the Best Answer
The consumer will likely consume more of good Y and less of good X.
The consumer will continue to buy the same quantities of both goods.
The consumer will buy more of good X despite the price increase.
The consumer will purchase less of both goods.
Understanding the Answer
Let's break down why this is correct
When the price of good X rises from $12 to $15, the consumer can buy less X for the same $60. Other options are incorrect because Some think the amount of each good stays the same after a price rise; Some believe a price hike will make the good more desirable.
Key Concepts
Optimal Purchase Combinations
hard level question
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Deep Dive: Optimal Purchase Combinations
Master the fundamentals
Definition
Optimal purchase combinations refer to the most efficient mix of goods a consumer can buy based on marginal utility per dollar. By comparing the marginal utility of different goods to their prices, consumers aim to maximize total utility within budget constraints. Understanding optimal purchase combinations helps individuals make rational consumption choices.
Topic Definition
Optimal purchase combinations refer to the most efficient mix of goods a consumer can buy based on marginal utility per dollar. By comparing the marginal utility of different goods to their prices, consumers aim to maximize total utility within budget constraints. Understanding optimal purchase combinations helps individuals make rational consumption choices.
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