As long as the marginal utilities per dollar obtained from the last unit of all

Question

As long as the marginal utilities per dollar obtained from the last unit of all products consumed are the same, _____.

a. the government will recognize this as an intolerable disequilibrium and will most likely intervene by imposing a tax and reallocate the consumer’s income

b. the consumer is not maximizing utility

c. the consumer is in equilibrium and will not reallocate income

d. the consumer is not in equilibrium and will reallocate income

e. the consumer is most likely operating a budget deficit

Explanation / Answer

c the consumer is in equilibrium and will not reallocate income

Marginal utility is the additional satisfaction a consumer gains from consuming one more unit of a good or service

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