Explore BrainMass

Explore BrainMass

    Purchasing behavior

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Given three goods with the symbols, 'x', 'y', and 'z', each with respective prices. Additionally, you also have budget or money income denoted as 'I' that combination of goods that will maximize the individual's utility.

    Discuss how an individual would change his purchasing behavior, if at the current bundle the MUx/Px > MUy/Py = MUz/Pz. Why?

    (Response to this question is mandatory and will account for 5% of your total score).

    © BrainMass Inc. brainmass.com March 4, 2021, 10:08 pm ad1c9bdddf
    https://brainmass.com/economics/personal-finance-savings/purchasing-behavior-303051

    Solution Preview

    When the marginal utility per dollar of consuming one good is greater than it is for another good, a rational person will shift toward that good. For example, if you discover a new flavor of ice cream, suddenly you may ...

    Solution Summary

    Purchasing behavior and marginal utility is examined.

    $2.49

    ADVERTISEMENT