When a consumer allocates her limited budgetary resources to maximize her well-being,____ is achieved.
A) the elimination of scarcity
B) market equilibrium
C) consumer equilibrium
D) the maximization of marginal utility

Question

Quizplus · Accepted Answer

Consumer equilibrium is achieved when a consumer allocates her limited budgetary resources to maximize her well-being. This occurs when the consumer has allocated her budget in such a way that the marginal utility per dollar spent is equal across all goods and services consumed. At this point, any reallocation of funds would result in a decrease in total utility because the consumer is already consuming the goods and services that provide the highest level of satisfaction per dollar spent. Therefore, the consumer has achieved the most efficient allocation of resources and is in a state of equilibrium.

When a Consumer Allocates Her Limited Budgetary Resources to Maximize