If a consumer is maximizing his/her utility for a given income, the:
A) marginal utility for every good purchased would be the same.
B) marginal utility per dollar spent for all goods would be the same.
C) marginal utility per dollar for all goods would be at a maximum.
D) total expenditure on each good would be the same.
E) number of units of each good consumed would be the same.

Question

Quizplus · Accepted Answer

When a consumer is maximizing their utility for a given income, they are allocating their spending in a way that the marginal utility per dollar spent for all goods is equal. In other words, the consumer is getting the most utility out of each dollar spent across all goods. This is known as the principle of equimarginal utility. Therefore, choice B is the correct answer.

If a Consumer Is Maximizing His/her Utility for a Given