What is consumer optimum according to utility theory?
What will be an ideal response?
Consumer optimum is the set of goods and services that maximizes the level of satisfaction for a consumer, given the consumer's income and the prices of the goods and services. At consumer optimum, the marginal utility per dollar spent is equal across all goods and services purchased.
You might also like to view...
Cost-push inflation occurs when a nation's:
a. Aggregate supply rises, causing rising prices and rising unemployment. b. Aggregate supply rises, causing rising prices and falling unemployment. c. Aggregate demand rises, which leads to a decrease in aggregate supply curve and an increase in prices. d. Aggregate supply falls, causing rising prices and rising unemployment.
When the Fed sells a security to a financial firm and the Fed agrees to buy back the security the next day, the transaction is known as
A) a repurchase agreement. B) a reverse repurchase agreement. C) an open market flip-flop. D) a federal funds swap.