If the marginal utility of each good consumers buy does not diminish but remains constant, we should witness consumers:
A) buying no goods at all.
B) spending all of their income on the good with the highest MU.
C) buying one of each good.
D) buying only the least expensive goods.
E) become indifferent to what goods they buy.

Question

Quizplus · Accepted Answer

If the marginal utility (MU) of a good remains constant, consumers will continue to derive the same level of satisfaction from each additional unit. Therefore, they will spend all their income on the good with the highest MU to maximize their total utility.

If the Marginal Utility of Each Good Consumers Buy Does