When a consumer chooses among a set of goods or services, utility is maximized when marginal utility
A) equals total utility.
B) is minimized.
C) per dollar spent is equal for all goods.
D) is greater than total utility.

Question

Quizplus · Accepted Answer

Utility is maximized when the consumer allocates their budget in such a way that the marginal utility per dollar spent is equal across all goods and services. This ensures that the last dollar spent on each good or service provides the same amount of additional satisfaction, leading to an optimal allocation of resources.

When a Consumer Chooses Among a Set of Goods or Services