If a consumer buys two different goods, the rational spending rule requires that the:
A. ratio of total utility to price be equal for the two goods.
B. total expenditure on the two goods be equal.
C. ratio of average utility to price be equal for the two goods.
D. ratio of marginal utility to price be equal for the two goods.
Answer: D
Economics
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If your income goes down, you will probably purchase fewer goods and services.
a. true b. false
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Which one of the following will shift the consumption function upward?
a. Higher interest rates. b. An increase in real assets. c. Expectations of future economic growth. d. Lower capacity utilization rates. e. A tax increase.
Economics