A consumer is buying good X where MUₓ ÷ Pₓ is greater than MUₘ. To reach equilibrium, he should

buy less of XCorrect answerYour answerbuy more of X, which lowers MUₓ until the two are equalCorrect answerYour answerstop buying XCorrect answerYour answerkeep his purchases as they areCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

A rupee spent on X now gives more utility than a rupee kept, so spending more on X raises satisfaction.
As he buys more, MUₓ falls (diminishing MU) until MUₓ ÷ Pₓ = MUₘ.

Concept: Moving to one-good equilibrium
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsEquilibrium with one good

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A consumer is buying good X where MUₓ ÷ Pₓ is greater than MUₘ. To reach equilibrium, he should

Explanation