According to the text, can we conclude that people will consume goods until the marginal utility of each good is zero?
A) Yes, because at that point total utility is maximum.
B) Yes, because at that point marginal utility is minimum.
C) No, because consumption is determined by total utility.
D) No, because consumption is determined by the marginal utility/price ratio.

Question

Quizplus · Accepted Answer

The text states that people will consume goods until the marginal utility per dollar spent is equal across all goods, meaning that their consumption is determined by the marginal utility/price ratio. Consuming until the marginal utility of each good is zero is not necessarily the case since that would result in no additional satisfaction from consuming more of the good.

According to the Text, Can We Conclude That People Will