Question

given that mux/px < muy/py, consumers who spend all their income on these two goods
can never maximize utility.
have maximized total utility.
can increase utility by buying more of x and less of y.
can increase utility by buying more of y and less of x.
question 16
to economists, utility means
marginal value.
relative value.
satisfaction.
usefulness.

Explanation:

For the first question, when \( \frac{MUX}{PX}<\frac{MUY}{PY} \), consumers can increase utility by re - allocating their spending. Since the marginal utility per dollar of \( Y \) is higher than that of \( X \), buying more \( Y \) and less \( X \) (by the law of diminishing marginal utility, as consumption of \( Y \) increases, \( MUY \) decreases and as consumption of \( X \) decreases, \( MUX \) increases) will move the consumer towards the utility - maximizing condition \( \frac{MUX}{PX}=\frac{MUY}{PY} \).

For the second question, in economics, utility is defined as the satisfaction or pleasure that a consumer derives from consuming a good or service. Marginal value is related to the change in value, relative value is about comparison between values, and usefulness is a more general non - economic term.

Answer:

For the first question: can increase utility by buying more of Y and less of X.
For the second question: satisfaction.