Which of the following occur when a person maximizes utility? I. The marginal utility of each good bought is equal.
II) The highest level of utility is attained.
III) All of a person's budget is spent.
A) I and II
B) I and III
C) II and III
D) I, II and III

Question

Quizplus · Accepted Answer

When a person maximizes utility, they achieve the highest level of utility possible given their budget (II), and they typically spend all of their budget to do so (III). The marginal utility per dollar spent is equalized across goods, not the marginal utility of each good.

Which of the Following Occur When a Person Maximizes Utility