The price of a pound of sirloin steak is five times the price of a pound of ground beef.You are not in consumer equilibrium unless:
A) you consume five times as much ground beef as you do sirloin steak.
B) you consume five times as much sirloin steak as you do ground beef.
C) the total utility you derive from consuming sirloin steak is five times the total utility you derive from consuming ground beef.
D) your marginal utility from the last pound of sirloin steak consumed is five times that of the last pound of ground beef consumed.

Question

Quizplus · Accepted Answer

Consumer equilibrium is achieved when the ratio of the marginal utility to price is equal for all goods. Since the price of sirloin steak is five times that of ground beef, the marginal utility of the last pound of sirloin steak consumed should be five times that of ground beef to maintain equilibrium.

The Price of a Pound of Sirloin Steak Is Five