When a consumer maximizes utility, the marginal utility per dollar spent must be the same for all goods and services in the consumption bundle. 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 optimal consumption rule states that consumers maximize their utility when the marginal utility per dollar spent is equal across all goods and services in their consumption bundle.

When a Consumer Maximizes Utility, the Marginal Utility Per Dollar