The consumer optimum for consuming two goods is achieved when
A) the total utility from each good is equal.
B) the price of each good is equal.
C) the price multiplied by the marginal utility is equal for the two goods.
D) the marginal utility per last dollar spent is equal for the two goods.

Question

Quizplus · Accepted Answer

The consumer optimum is the combination of goods where the marginal utility per last dollar spent is equal for both goods. This occurs when the consumer allocates their budget in such a way that the marginal utility per dollar spent on each good is equal. This ensures that the consumer gets the highest total utility possible from their available budget. Therefore, the answer is D.

The Consumer Optimum for Consuming Two Goods Is Achieved When