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When the marginal utility from the consumption of commodity X (Mux) is greater than the...

Economics
WAEC 2023

When the marginal utility from the consumption of commodity X (Mux) is greater than the price commodity X (Px), a rational consumer should

  • A. strive to remain in disequilibrium
  • B. consume the same quantity of commodity X
  • C. consume more of commodity X
  • D. reduce consumption of commodity X
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Correct Answer: Option C
Explanation

A rational consumer should consume more of commodity X when the marginal utility from the consumption of commodity X (Mux) is greater than the price commodity X (Px). This is because the consumer is getting more satisfaction from consuming each additional unit of commodity X than they are paying for it. As a result, the consumer should continue to consume more of the commodity until the marginal utility is equal to the price.


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Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC offline past questions - with all answers and explanations in one app - Download for free
WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC offline past questions - with all answers and explanations in one app - Download for free