The equimarginal rule
A) equates the marginal utility per dollar spent on each good purchased.
B) states that in order to maximize utility the consumer should buy more of those goods with a high marginal utility.
C) states that in order to maximize utility the consumer should buy more of those goods that cost less.
D) none of the above

Question

Quizplus · Accepted Answer

The equimarginal rule states that in order to maximize total utility, a consumer should allocate their spending in such a way that the marginal utility per dollar spent on each good purchased is equal. In other words, the consumer should continue buying goods until the marginal utility per dollar spent is the same for each good. Choice B and C both contain incorrect statements.

The Equimarginal Rule