For a consumer consumes the goods X and Y, the satisfaction is maximized when the marginal rate of substitution is equal to the ratio of the prices. an increase in the price of one good causes that good’s quantity consumed to decrease and another goods’ consumption to increase. The indifference curves are downward sloping and cannot intersect one another. If the price of one good increases, the budget line shifts inward. If the price of one good decreases, the budget line shifts outward. The true answer is C.