Total utility is maximized when marginal utility per additional dollar spent is the same for all goods.

Name: Total utility is maximized when marginal utility per additional dollar spent is the same for all goods.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This statement is true. Maximizing total utility occurs when the consumer has allocated their budget in a way that the marginal utility per additional dollar spent is equal for all goods. The consumer can no longer increase their overall satisfaction by reallocating their budget.

Total Utility Is Maximized When Marginal Utility Per Additional Dollar