When the marginal utility per dollar of good A exceeds the marginal utility per dollar of good B,
A) the consumer should consume more of good A.
B) the consumer is consuming too much of good A.
C) good B must have a negative marginal utility.
D) the consumer is in an optimal situation if the price of good A exceeds the price of good B.

Question

Quizplus · Accepted Answer

When the marginal utility per dollar of good A exceeds the marginal utility per dollar of good B, the consumer should consume more of good A. This is because for every dollar spent, good A provides more marginal utility compared to good B. As a result, the consumer will have higher overall utility by consuming more of good A.

When the Marginal Utility Per Dollar of Good a Exceeds