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Problem regarding the utility maximizing choice

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A consumer with an income of $240 is spending it all on 12 units of good X and 18 units of good Y. The price of X is $5 and the price of Y is $10. The marginal utility of the last X is 20 and the marginal utility of the last Y is $30. What should the consumer do?

a. Nothing, this is the utility maximizing choice.

b. Buy more Y and less X because MUy is higher than MUx.

c. Buy more Y and less X because the marginal utility per dollar of Y is higher. d. Buy more X and less Y because the price of X is lower. Please explain.

Reference no: EM131098529

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