Among all the combinations of goods attainable by a consumer facing a budget constraint,the one that maximizes total utility is the one that
A)maximizes marginal utility per dollar spent on each good
B)maximizes marginal utility per pound,or other physical quantity,of each good
C)equates the marginal utilities per dollar spent on each good
D)equates the marginal utilities per pound,or other physical quantity,of each good
E)drives the marginal utility of each good to zero

Question

Quizplus · Accepted Answer

The consumer maximizes total utility by allocating their budget such that the marginal utility per dollar spent is equal across all goods. This ensures that the last dollar spent on each good provides the same additional utility, optimizing the overall satisfaction within the budget constraint.

Among All the Combinations of Goods Attainable by a Consumer