The state of consumer optimum is reached when the consumer's
A) total utility/marginal utility ratio for all items is equal.
B) total utility/price ratio for all items is equal.
C) marginal utility for a product is zero.
D) marginal utility/price ratios for all items are equal.

Question

Quizplus · Accepted Answer

The state of consumer optimum is reached when the marginal utility/price ratio for all items is equal. This means that the consumer is getting the most satisfaction for their money spent. Option A and B are not correct because it is not necessary that the total utility/marginal utility ratio or total utility/price ratio will be equal for all items. Option C is not correct because the marginal utility of a product being zero would mean that the consumer is not getting any satisfaction from that product, which is not optimum.

The State of Consumer Optimum Is Reached When the Consumer's