Asked by
Nitish Mehta
on Oct 08, 2024
Verified
A consumer who has a limited budget will maximize utility or satisfaction when the:
A) ratios of the marginal utility of each product purchased divided by its price are equal.
B) total utility derived from each product purchased is the same.
C) marginal utility of each product purchased is the same.
D) price of each product purchased is the same.
Limited Budget
A financial plan that is constrained by a limited amount of resources, requiring prioritization and careful management.
Utility Maximization
The economic principle whereby individuals or firms seek to allocate their resources in a way that maximizes their satisfaction or utility.
- Comprehend the concept of consumer equilibrium and the significance of marginal utility in determining consumption decisions.
- Assess and compute the most favorable consumption pairings according to the marginal utility per dollar utilized.
Verified Answer
SR
Learning Objectives
- Comprehend the concept of consumer equilibrium and the significance of marginal utility in determining consumption decisions.
- Assess and compute the most favorable consumption pairings according to the marginal utility per dollar utilized.