If the marginal utility per dollar is not the same for each good,the consumer could _____ her utility by spending ______ on goods for which the marginal utility per dollar is lower.
A)decrease,less
B)increase,more
C)maximize,more
D)increase,less

Question

Quizplus · Accepted Answer

If the marginal utility per dollar is not the same for each good, the consumer could increase her overall utility by spending less on goods for which the marginal utility per dollar is higher and more on goods for which the marginal utility per dollar is lower. This is because the consumer would be getting more utility per dollar by reallocating her spending in this way. Therefore, the answer is D, increase spending less, to increase overall utility.

If the Marginal Utility Per Dollar Is Not the Same