A consumer is maximizing her utility with a particular money income when A)the total utility derived from each product consumed is the same. B)MU a/ Pₐ = MU b/ Pᵦ = MU c/ P_c = . . . = MU n/ Pₙ . C)MU a = MU b = MU c = . . . = MU n. D)Pₐ = Pᵦ = P_c = . . . = Pₙ .

Question

Quizplus · Accepted Answer

The correct answer is B) MUa/Pa = MUb/Pb = ... = MUn/Pn. This is the condition for consumer equilibrium in utility maximization, where MU represents marginal utility and P represents price. It means that the consumer is allocating their budget in such a way that the last dollar spent on each good provides the same amount of additional satisfaction.

A Consumer Is Maximizing Her Utility with a Particular Money