The consumer optimum is the set of goods and services, subject to the limited income of the consumer, that
A) the consumer can afford to buy.
B) is characterized by zero marginal utility on each good and service.
C) maximizes the level of satisfaction for each consumer.
D) is characterized by increasing marginal utility.

Question

Quizplus · Accepted Answer

The consumer optimum refers to the combination of goods and services that maximizes the level of satisfaction for the consumer, subject to the constraint of a limited budget. Therefore, option C is correct. Option A is incorrect because it only refers to the affordability of goods and services, which is necessary but not sufficient to determine the consumer optimum. Options B and D are also incorrect because they are not necessary conditions for the consumer optimum.

The Consumer Optimum Is the Set of Goods and Services