For good A and good B, the consumer maximizes personal satisfaction when
A) MUA/PA = PB/MUB.
B) PA/MUA = PB/MUB.
C) MUA/PA = MUB/PB.
D) MUA/MUB = PA/PB.

Question

Quizplus · Accepted Answer

The consumer maximizes personal satisfaction when the MUA (marginal utility of A) per dollar spent on A is equal to the MUB (marginal utility of B) per dollar spent on B. Rewriting this equation, we get MUA/PA = MUB/PB. Therefore, choice C is the correct answer. Choices A, B, and D do not represent the correct equation for maximizing personal satisfaction.

For Good a and Good B, the Consumer Maximizes Personal