In the theory of consumer choice, when a person is choosing which good or service to consume, how does he or she select the units of good or service to consume?
A) The person selects the good or service based on need.
B) The person selects the units of a good or service that generates the greatest marginal utility. This process continues until there budget is spent.
C) The person selects the units of a good or service that generates the greatest marginal utility per dollar spent. This process continues until the person's budget is spent.
D) The person randomly selects what they buy until the budget is spent.

Question

In the theory of consumer choice, when a person is choosing which good or service to consume, how does he or she select the units of good or service to consume?
A) ​The person selects the good or service based on need.
B) ​The person selects the units of a good or service that generates the greatest marginal utility. This process continues until there budget is spent.
C) ​The person selects the units of a good or service that generates the greatest marginal utility per dollar spent. This process continues until the person's budget is spent.
D) ​The person randomly selects what they buy until the budget is spent. ​

Quizplus · Accepted Answer

In the theory of consumer choice, the person selects the units of a good or service that generate the greatest marginal utility per dollar spent. This ensures that the person is maximizing their satisfaction while staying within their budget constraints.

In the Theory of Consumer Choice, When a Person Is