A consumer maximizes utility when she consumes at a point where?
A. ?the marginal utility of each good is the same.
B. ?the marginal utility per dollar spent on each good is the same.
C. ?the price of each good is the same.
D. ?All of the above statements are true.
Ans: B. ?the marginal utility per dollar spent on each good is the same.
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Goods that are very useful and highly desired are likely to be
A) expensive if they are relatively abundant. B) inexpensive if they are relatively abundant. C) inexpensive if they are relatively rare. D) expensive no matter if they are relatively abundant or rare.
When government spending and tax revenue are equal, G = T, the economy
a. must be in equilibrium b. has achieved full employment without inflation c. has a budget deficit d. has a budget surplus e. has a balanced budget