If Arnold thinks his last dollar spent golfing yields less satisfaction than the last dollar spent on movies, and Arnold is a utility-maximizing consumer, he should
A)golf more so that the total satisfaction from this activity will increase
B)spend less on movies so that the marginal satisfaction from expenditures in this area will increase
C)golf less and spend more on movies
D)eliminate golfing from his schedule
E)golf more since it costs less

Question

Quizplus · Accepted Answer

Since Arnold is a utility-maximizing consumer, he will always choose the option that gives him the most satisfaction. If he believes that his last dollar spent on movies gives him more satisfaction than his last dollar spent on golfing, he should reduce his spending on golfing and increase his spending on movies until he reaches a point where the satisfaction he gets from spending an additional dollar on movies is equal to the satisfaction he gets from spending an additional dollar on golfing. Therefore, he should golf less and spend more on movies.

If Arnold Thinks His Last Dollar Spent Golfing Yields Less