At the optimal consumption bundle:
A)the marginal utility of all goods consumed is equal.
B)the marginal utility per dollar spent is equalized across all goods consumed.
C)the price of all goods consumed is equal.
D)total utility from all goods consumed is equal.

Question

Quizplus · Accepted Answer

At the optimal consumption bundle, the consumer has maximized their utility subject to their budget constraint by allocating their spending in such a way that the marginal utility per dollar spent on each good is equal. This is known as the principle of equal marginal utility per dollar spent. It ensures that the consumer is getting the most satisfaction from their spending and is making the most efficient use of their budget.

At the Optimal Consumption Bundle