When a consumer maximizes utility,the marginal utility from the last dollar spent on all goods and services in the consumption bundle must be the same.This is referred to as:
A)the law of demand.
B)the optimal consumption rule.
C)the budget constraint.
D)consumption possibilities.

Question

Quizplus · Accepted Answer

The situation described in the question is known as the optimal consumption rule, where the consumer allocates their income in such a way that the marginal utility per dollar spent on each good is equal. This ensures that the consumer is maximizing their utility given their budget constraint. Therefore, the correct answer is B - the optimal consumption rule.

When a Consumer Maximizes Utility,the Marginal Utility from the Last