A consumer is maximizing her utility with a particular money income when:

A) the total utility derived from each product consumed is the same.
B) MU_a/P_a = MU_b/P_b = MU_c/P_c = ...= MU_n/P_n.
C) MU_a = MU_b = MU_c = ...= MU_n.
D) P_a = P_b = P_c = ...= P_n.

Question

Taylor Burson · Accepted Answer

Final Answer : B, Explanation :  A consumer maximizes utility when the marginal utility per dollar spent (MUS/P) is equal across all goods and services consumed. This ensures that the last dollar spent on each item provides the same amount of additional satisfaction, leading to an optimal allocation of the consumer's budget.

A consumer is maximizing her utility with a particular money income when:

A) the total utility derived from each product consumed is the same.
B) MU_a/P_a = MU_b/P_b = MU_c/P_c = ...= MU_n/P_n.
C) MU_a = MU_b = MU_c = ...= MU_n.
D) P_a = P_b = P_c = ...= P_n.

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Learning Objectives

Learning Objectives

Related questions

A consumer is maximizing her utility with a particular money income when:A) the total utility derived from each product consumed is the same.B) MUa/Pa = MUb/Pb = MUc/Pc = ...= MUn/Pn.C) MUa = MUb = MUc = ...= MUn.D) Pa = Pb = Pc = ...= Pn.

Definitions

Learning Objectives

Learning Objectives

Related questions

A consumer is maximizing her utility with a particular money income when:

A) the total utility derived from each product consumed is the same.
B) MU_a/P_a = MU_b/P_b = MU_c/P_c = ...= MU_n/P_n.
C) MU_a = MU_b = MU_c = ...= MU_n.
D) P_a = P_b = P_c = ...= P_n.