If a consumer buys two different goods, the rational spending rule requires that the:
A)total expenditure on the two goods be equal.
B)ratio of total utility to price be equal for the two goods.
C)ratio of average utility to price be equal for the two goods.
D)ratio of marginal utility to price be equal for the two goods.

Question

Quizplus · Accepted Answer

The rational spending rule maintains that the ratio of marginal utility to price must be the same for both goods.

If a Consumer Buys Two Different Goods, the Rational Spending