According to the marginal utility theory,consumers
A)maximize utility and minimize marginal utility.
B)maximize utility and equalize marginal utility per dollar across all goods.
C)save part of their income for future consumption.
D)maximize utility by spending the most on the least expensive good.
E)maximize utility by spending the least on the least expensive good.

Question

Quizplus · Accepted Answer

According to the marginal utility theory, consumers aim to maximize their overall utility by equalizing the marginal utility per dollar spent on each good. This means that consumers will continue to consume a good until the marginal utility per dollar spent on it is equal to the marginal utility per dollar spent on any other good available to them. This ensures that they are getting the most utility possible from their limited budget.

According to the Marginal Utility Theory,consumers