If a consumer spends all of his or her income and the marginal utility per dollar is equal for all goods, then
A) marginal utility is maximized.
B) total utility is maximized.
C) a consumer could not be better off even with greater income.
D) the proportion of income spent on each good must be equal.

Question

Quizplus · Accepted Answer

When the marginal utility per dollar is equal for all goods, the consumer is maximizing total utility given their budget constraint, as they are allocating their resources in the most efficient way possible.

If a Consumer Spends All of His or Her Income