If a consumer is maximizing their utlity, they have Multiple Choice a) consumed

Question

If a consumer is maximizing their utlity, they have

Multiple Choice

a) consumed goods so that the marginal utility per dollar of each item consumed is equal

b) have consumed only goods with the highest initial marginal utility

c) have saved for the future

d) purchased only candy; because chocolate is the key to happiness.

a) consumed goods so that the marginal utility per dollar of each item consumed is equal

b) have consumed only goods with the highest initial marginal utility

c) have saved for the future

d) purchased only candy; because chocolate is the key to happiness.

Explanation / Answer

Answer ) a) consumed goods so that the marginal utility per dollar of each item consumed is equal.

To maximize total utility, a mix of goods must be consumed so that the last unit of each type of item consumed yields the same marginal utility per dollar spent.

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