A state of consumer equilibrium for two goods consumed exists when the:
A) marginal utility of all goods is the same for the last dollar spent on each good.
B) marginal utility per dollar's worth of two goods is the same for the last dollar spent on each good.
C) price of two goods is the same for the last dollar spent on each good.
D) marginal cost per dollar spent on two goods is the same.

Question

Quizplus · Accepted Answer

Consumer equilibrium is achieved when the marginal utility per dollar spent on each good is equal. This means that the consumer is getting the most satisfaction possible from the money they have to spend. A and C are incorrect because marginal utility and price do not have to be equal, and D is incorrect because marginal cost is not relevant to consumer equilibrium.

A State of Consumer Equilibrium for Two Goods Consumed Exists