When comparing two goods for purchase,it is useful to acknowledge the marginal utility and the dollar price.The optimizing decision requires choosing the good with the
A) higher total utility per dollar.
B) higher marginal utility per dollar.
C) lower marginal price.
D) higher marginal utility.
E) equivalent marginal and dollar prices.

Question

Quizplus · Accepted Answer

The optimizing decision requires choosing the good with the higher marginal utility per dollar, as this represents the additional satisfaction gained per dollar spent. Total utility per dollar may not be the best measure as it doesn't take into account the diminishing marginal utility for each additional unit consumed. Lower marginal price does not necessarily equate to better value for money as it doesn't take into account the marginal utility gained per dollar spent. Higher marginal utility alone is not enough as it doesn't consider the cost of obtaining that additional satisfaction. Equivalent marginal and dollar prices don't provide any useful information for decision-making.

When Comparing Two Goods for Purchase,it Is Useful to Acknowledge