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 of good X is less than the marginal utility per dollar of good Y,then the consumer should shift some spending from X to Y.

Question

Quizplus · Accepted Answer

According to the law of diminishing marginal utility, as a consumer consumes more and more of a good, the marginal utility they derive from each additional unit decreases. Therefore, the consumer should shift their spending from a good with lower marginal utility per dollar to a good with higher marginal utility per dollar. This will increase their overall satisfaction and utility, resulting in a higher consumer surplus.

Which One of the Following Statements Is True