A consumer maximizes utility when:
A) some of the budget is left unspent.
B) he or she equalizes the marginal utility per dollar spent on each good.
C) the marginal utility per dollar spent on one good is higher than the marginal utility per dollar spent on another good.
D) the consumer spends all of his or her money on the good that is the cheapest.

Question

Quizplus · Accepted Answer

A consumer maximizes utility when the marginal utility per dollar spent is equal across all goods. This ensures that the consumer is getting the most satisfaction possible from their budget, by allocating it in a way that the last dollar spent on each good provides the same amount of utility.

A Consumer Maximizes Utility When