If a rational consumer is in equilibrium, which of the following conditions will hold true?
A) MUa = MUb = MUc = . . . = MUn.
B) The marginal utility of each good purchased will be zero.
C) The marginal utility of the last dollar spent on each good purchased will be the same.
D) The total utility obtained from each good purchased will be the same.

Question

Quizplus · Accepted Answer

In equilibrium, a rational consumer will allocate their income in such a way that the marginal utility per dollar spent on each good is equal. This means that the marginal utility of the last dollar spent on each good purchased will be the same. Option A is not necessarily true, as the marginal utility of each good may vary. Option B is not possible as the consumer will only continue to purchase additional units of a good as long as the marginal utility is positive. Option D is not necessary for equilibrium, as the consumer may maximize their satisfaction even if the total utility obtained from each good is different.

If a Rational Consumer Is in Equilibrium, Which of the Following