We can state the utility-maximizing rule in words in the following way: A person maximizes utility when she equalizes the ________ across products.
A) total utility
B) total utility per dollar spent
C) marginal utility
D) marginal utility per dollar spent

Question

Quizplus · Accepted Answer

The utility-maximizing rule states that a person maximizes utility when she equalizes the marginal utility per dollar spent across products. This means that for each additional dollar spent on a product, the person should derive the same additional utility. By equalizing the marginal utility per dollar spent, the person can achieve the highest level of total utility given her budget constraint.

We Can State the Utility-Maximizing Rule in Words in the Following