When joe maximizes utility, he finds that his mrs of x for y is greater than px/py. it is most likely that:?

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Business

Georgia Cowan

25 June, 15:45

When joe maximizes utility, he finds that his mrs of x for y is greater than px/py. it is most likely that:?

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Khloe Mcclain · Answer 1

When joe maximizes utility, he finds that his mrs of x for y is greater than px/py. it is most likely that: joe is not consuming good Y

For normal utility maximation, MRS should equal with px/py. So, in this case, we can conclude that when Joe maximizes his utility, he only consume product X over product Y