Question: Let MU A be the marginal utility that the consumer gets from good A, MU B be the marginal utility that the consumer gets from

  1. Let MUA be the marginal utility that the consumer gets from good A, MUB be the marginal utility that the consumer gets from good B, PA the price of good A, and PB the price of B. We know that consumers will increase their overall utility level (that they obtain from an expenditure of a given size), by spending less on B and more on A if:

  1. MUA > MUB

  1. MUA< MUB

  1. MUA MUB

------- < --------

PA PB

  1. MUA MUB

------- > --------

PA PB

  1. MUA x PA > MUBx PB

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