Suppose a consumer has a utility function U(x, y) = 2xy. The marginal utilities are MUx = 2y, MUy = 2x. Suppose price of x is Px = 1, price of y is Py = 2, and the consumer’s income is $12.
Suppose the consumer decides to buy 4 units good x and 4 units good y. What is the marginal utility per dollar spent on x? What is the marginal utility per dollar spent on y? What does this tell you about how the consumer should substitute one good for the other?