If Ethan thinks the last dollar spent on bowling yields more satisfaction than the last dollar spent on hamburgers, and Ethan is a utility-maximizing consumer, he should
A) bowl less, so the marginal satisfaction from expenditures in this area will increase.
B) spend more on hamburgers, so total satisfaction from that activity will increase.
C) eliminate spending on hamburgers.
D) bowl more and spend less on hamburgers.

Question

Quizplus · Accepted Answer

Ethan should allocate more of his budget to bowling and less to hamburgers until the marginal satisfaction per dollar spent is equalized across both activities, maximizing his total utility.

If Ethan Thinks the Last Dollar Spent on Bowling Yields