An optimizing consumer makes her purchase decisions based on ________.
A) the total benefits at various levels of consumption
B) the benefits per dollar spent at the margin
C) the total benefits per dollar spent at various levels of consumption
D) the benefits from the first dollar spent on consumption

Question

Quizplus · Accepted Answer

An optimizing consumer makes her purchase decisions based on the benefits per dollar spent at the margin. This means that the consumer considers the additional utility received from spending one more dollar on a particular good or service. By comparing the marginal utility with the price of the good, the consumer can determine whether or not to make the purchase.

An Optimizing Consumer Makes Her Purchase Decisions Based on ________