A consumer's optimum is found when
A) the marginal utility of the last dollar spent equals zero for each good.
B) the marginal utility of each good is increasing and the total income is spent.
C) the total utility of each good is the same and the total income is spent.
D) the marginal utility of the last dollar spent on each good is the same and all income is spent.

Question

Quizplus · Accepted Answer

A consumer's optimum is found when the marginal utility of the last dollar spent on each good is the same and all income is spent. This is because at the optimum, the consumer has allocated their budget in such a way that the additional satisfaction gained from spending the last dollar on each good is equal. This ensures that the consumer is making the most efficient use of their budget and maximizing their total utility.

A Consumer's Optimum Is Found When