If a person is receiving greater marginal utility per dollar from consuming one good than another, it follows that he or she is
A)maximizing disutility.
B)not maximizing utility.
C)maximizing utility.
D)There is not enough information to answer the question.

Question

Quizplus · Accepted Answer

To maximize utility, a consumer should allocate their budget in a way that the marginal utility per dollar is equal across all goods. If a person is receiving greater marginal utility per dollar from one good than another, it indicates that they could increase their overall utility by reallocating their spending, thus they are not maximizing utility.

If a Person Is Receiving Greater Marginal Utility Per Dollar