The maximum-satisfaction rule for spending consumer income is: equalize the marginal utilities of the last unit purchased of every commodity.

Question

Quizplus · Accepted Answer

The maximum-satisfaction rule, also known as the equi-marginal principle, states that consumers should allocate their income so that the marginal utility per dollar spent is equal across all goods, not the marginal utilities of the last unit purchased.

The Maximum-Satisfaction Rule for Spending Consumer Income Is: Equalize the Marginal