Consumers adjust their purchasing behavior so that:
A) they purchase as many scarce resources as possible.
B) marginal rate of substitution is maximized.
C) marginal rate of substitution is minimized.
D) the ratio of prices they pay equals their marginal rate of substitution.

Question

Quizplus · Accepted Answer

Consumers adjust their purchasing behavior in such a way that the ratio of prices they pay for the goods they purchase equals their marginal rate of substitution. This means that they allocate their budget in a manner in which they get the most satisfaction from the goods and services they purchase. As long as they can get more satisfaction from one good by sacrificing less of another good, they will adjust their consumption accordingly until the ratio of prices they pay equals their marginal rate of substitution.

Consumers Adjust Their Purchasing Behavior So That