A consumer maximizes utility by allocating time so that the expected marginal utilities of the last unit of time spent in each activity are identical.

Question

Quizplus · Accepted Answer

This statement describes the principle of equal marginal utility per unit of time, which states that a consumer will allocate their time among activities so that they receive the same expected marginal utility from the last unit of time spent in each activity. This ensures that the consumer is maximizing their overall utility.

A Consumer Maximizes Utility by Allocating Time So That the Expected