<p>I think the problem is with the tenses. All the analysis is made before actual transactions take place. We are evaluating an hypothetical situation: A consumer considering buying a bundle <span class="math-container">$a=(x_1,y_1)$</span> realizes that if she did, the marginal utility of the last dollar spent on <span class="math-container">$x$</span> would be lower than that of the last dollar spent on <span class="math-container">$y.$</span> We observe that switching expenditure from <span class="math-container">$X$</span> to <span class="math-container">$Y$</span> would result in larger total utility. And since we expect consumers to maximize their utility, they will do so. This results in the consumer withdrawing part from the expenditure in <span class="math-container">$X$</span> and spending on <span class="math-container">$Y$</span> <strong>with respect to the hypothetical bundle</strong> <span class="math-container">$a$</span></p>

CC BY-SA 4.0
2019-01-11T11:12:12.030Z
2019-01-11T11:12:12.030Z
Patricio
<p>If the last dollar spent on commodity X gives him less marginal utility, he will withdraw this amount from X and spend it on Y if it gives him higher marginal utility. Here consumer how can consumer withdraw amount from x and spend it on y?</p>

<microeconomics><consumer-theory>
Consumer behaviour
Nandy
# Consumer behaviour

(Asked by: username_0 on 2019-01-11)

If the last dollar spent on commodity X gives him less marginal utility, he will withdraw this amount from X and spend it on Y if it gives him higher marginal utility. Here consumer how can consumer withdraw amount from x and spend it on y?

**Tags:** microeconomics, consumer-theory


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## 1 answers

### Answer by username_1 on 2019-01-11. Score: 2

I think the problem is with the tenses. All the analysis is made before actual transactions take place. We are evaluating an hypothetical situation: A consumer considering buying a bundle $a=(x\_1,y\_1)$ realizes that if she did, the marginal utility of the last dollar spent on $x$ would be lower than that of the last dollar spent on $y.$ We observe that switching expenditure from $X$ to $Y$ would result in larger total utility. And since we expect consumers to maximize their utility, they will do so. This results in the consumer withdrawing part from the expenditure in $X$ and spending on $Y$ **with respect to the hypothetical bundle** $a$


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