If a consumer concludes that the marginal utility of the last dollar spent on vegetables exceeds the marginal utility of the last dollar spent on junk food, he will respond by
A) consuming relatively more junk food and fewer vegetables.
B) consuming relatively more vegetables and less junk food.
C) consuming equal amounts of vegetables and junk food.
D) halting consumption of junk food altogether.

Question

Quizplus · Accepted Answer

If the consumer concludes that the marginal utility of the last dollar spent on vegetables exceeds the marginal utility of the last dollar spent on junk food, he will respond by consuming relatively more vegetables and less junk food because he will get more satisfaction from consuming vegetables than junk food. This is because the marginal utility of every additional unit of vegetables consumed is higher than the marginal utility of every additional unit of junk food consumed. Therefore, the optimal choice is to consume more of the good with a higher marginal utility.

If a Consumer Concludes That the Marginal Utility of the Last