If a consumer is faced with a choice of products A, B, C, ..., and has a given money income, the consumer's utility will be maximized when
A) TUA = TUB = TUC = ...
B) MUA = PA; MUB = PB; MUC = PC; ...
C) MUA = MUB = MUC = ...
D) MUA/PA = MUB/PB = MUC/PC = ...
E) PA = PB = PC = ...

Question

Quizplus · Accepted Answer

When a consumer maximizes utility, they are essentially getting the most satisfaction possible per unit of money spent. This can be achieved when the marginal utility per dollar spent is equal across all products. Therefore, the correct answer is D, which states that the ratio of marginal utility to price should be the same for all products. This ensures that the consumer is getting the most satisfaction for their money spent.

If a Consumer Is Faced with a Choice of Products