A consumer who has a limited budget will maximize utility or satisfaction when the
A)ratios of the marginal utility of each product purchased divided by its price are equal.
B)total utility derived from each product purchased is the same.
C)marginal utility of each product purchased is the same.
D)price of each product purchased is the same.

Question

Quizplus · Accepted Answer

The consumer maximizes utility when the ratios of the marginal utility of each product to its price are equal, ensuring the most efficient allocation of their limited budget across different goods.

A Consumer Who Has a Limited Budget Will Maximize Utility