A utility-maximizing consumer will
A)consume at a point on her budget line
B)consume each good until its marginal utility is zero
C)adjust her consumption pattern so that the marginal utilities of all goods are equal
D)consume more of a good only if its price rises
E)stop consuming any good whose price rises

Question

Quizplus · Accepted Answer

A utility-maximizing consumer will consume at a point on her budget line where the marginal utility per dollar spent on all goods is equal. This is achieved by comparing the marginal utility per dollar of each good and adjusting the consumption of each good until the optimal point is reached where the budget is fully consumed. Therefore, choice A is the best answer as it correctly reflects this optimal point. Choices B, C, D, and E do not reflect the optimal consumption pattern for a utility-maximizing consumer.

A Utility-Maximizing Consumer Will