The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3

-If a consumer is buying three goods A, B, and C, then she will be in equilibrium when total utility from each good is equal.

Question

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3
 
-If a consumer is buying three goods A, B, and C, then she will be in equilibrium when total utility from each good is equal.

Quizplus · Accepted Answer

This statement is not necessarily true. A consumer may be in equilibrium when the marginal utilities per dollar spent on each good are equal, regardless of the total utility from each good. Additionally, a consumer may have a different level of utility for each good and still be in equilibrium as long as she is maximizing her total utility given her budget constraint.

The Below Figure Shows the Various Combinations of the Goods