Arnold is a utility-maximizing consumer.If he thinks his last dollar spent on playing golf yields less satisfaction than the last dollar spent on movies,he should _____
A)play more golf so that the total satisfaction derived from golf increases.
B)spend less on movies so that the marginal satisfaction of a movie increases.
C)play less golf and spend more on movies.
D)not play golf at all.
E)play more golf because it costs less.

Question

Quizplus · Accepted Answer

As a utility-maximizing consumer, Arnold should allocate his budget in a way that maximizes his total satisfaction. If he thinks his last dollar spent on playing golf yields less satisfaction than the last dollar spent on movies, then he should reduce his spending on golf and increase his spending on movies. This will result in a higher total satisfaction, as he is allocating his budget in a way that gives him more satisfaction from each additional dollar spent. Therefore, choice C is the best option.

Arnold Is a Utility-Maximizing Consumer