Which one of the following statements is true? A)Since consumers of a good consume this good until the price equals the value of the last unit,they clearly get no benefit from consuming this good. B)Consumers choosing between goods X and Y will set MU_X = MU_Y. C)The value of a good to a consumer is measured by the price. D)Consumer surplus on a unit of a good will never be zero. E)If the marginal utility per dollar from good X is less than the marginal utility per dollar from good Y,then the consumer should shift some spending from X to Y.

Question

Quizplus · Accepted Answer

This statement reflects the concept of marginal utility theory, which states that a consumer should allocate their spending based on the marginal utility per dollar of each good. If the marginal utility per dollar from one good is less than another, it is more beneficial for the consumer to shift spending towards the good with higher marginal utility per dollar. The other statements are incorrect. A) Consumers receive benefits from consuming goods even if they consume a good until its price equals the value of the last unit. B) This equation is incorrect and does not accurately reflect consumer behavior. C) The value of a good to a consumer is based on their personal preferences and utility, not the price. D) Consumer surplus on a unit of a good can be zero if the price paid for the unit equals the consumer's willingness to pay for it.

Which One of the Following Statements Is True