The equimarginal principle may be applied effectively any time a fixed budget must be allocated among competing uses.

Question

Quizplus · Accepted Answer

The equimarginal principle states that to maximize utility, a consumer should allocate their budget between different goods in such a way that the marginal utility obtained from the last dollar spent on each good is equal. Therefore, it can be applied effectively any time a fixed budget must be allocated among competing uses.

The Equimarginal Principle May Be Applied Effectively Any Time a Fixed