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Answer:
The utility maximizing consumption decision states that the consumers decided to allocate their money incomes so that the last dollar spent on each product purchased yields the same amount of extra marginal utility. The basic utility maximizing condition is MU1/P1 = MU2 / P2. So, Part b. is True. Also the Marginal rate of substitution(MRS) is also equal to MU1/MU2 . So also c. part is also correct as it is also same as part b after transformation. Now, the Marginal rate of substitution of good 1 for good 2 is equal to ∆2/∆1. So the option a is also correct by transforming the a part. So the correct option is d that is False.
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