Suppose each additional unit of Good X adds three times as much to your total satisfaction as is added by each additional unit of Good Y, and that Good Y costs $12.00. To maximize your satisfaction from consuming Good X and Good Y, you should be willing to spend:

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The principle of marginal utility per dollar spent states that to maximize total satisfaction, the consumer should allocate their budget in such a way that the marginal utility per dollar spent is equal across all goods. Since each additional unit of Good X adds three times as much satisfaction as Good Y, and Good Y costs $12.00, the consumer should be willing to spend up to $36.00 on Good X (3 times the cost of Good Y) to maintain this balance and maximize satisfaction.

Suppose Each Additional Unit of Good X Adds Three Times