For a consumer to maximize utility from a given income,
A)the marginal utility from each good must be maximized.
B)the total utility from each good must be maximized.
C)the marginal utilities of all goods and services consumed must be equal.
D)the marginal utility per dollar from all goods and services consumed must be equal.
E)the amount of each good consumed per dollar must be equal.

Question

Quizplus · Accepted Answer

Maximizing utility requires a consumer to allocate their income in a way that maximizes the amount of marginal utility per dollar spent. In other words, the consumer should purchase goods and services that give them the most satisfaction per dollar spent. This ensures that the consumer is getting the most value out of their budget.

For a Consumer to Maximize Utility from a Given Income