According to utility theory, consumer purchase decisions are made such that
A) the value of the ratio of marginal utility to price for the last units purchased and consumed is equal.
B) the difference between the value of the marginal utility of the last unit purchased and the price paid is maximized.
C) the total utility of the last unit purchased is equal to the price of that unit.
D) the total utility from consuming the good is less than the marginal utility of the last unit consumed.

Question

Quizplus · Accepted Answer

Utility theory posits that consumers allocate their spending so that the last unit of currency spent on each good provides the same marginal utility per unit of currency, hence the ratio of marginal utility to price is equalized across goods.

According to Utility Theory, Consumer Purchase Decisions Are Made Such