According to the utility theory,in "consumer equilibrium," households have _____
A)consumed as much of every commodity as they wanted.
B)spent their incomes in such a way that their overall satisfaction is maximized.
C)spent their incomes in such a way that their marginal utility is maximized.
D)spent their incomes in such a way that their marginal utility is zero for every product consumed.
E)spent their incomes in such a way that their total utility is zero.

Question

Quizplus · Accepted Answer

According to the utility theory, in "consumer equilibrium," households have spent their incomes in a way that their overall satisfaction is maximized. This means that the consumer has allocated their budget so that the marginal utility per dollar spent on every good is equal. This maximizes their total utility (overall satisfaction) and leads to consumer equilibrium. Therefore, choice (B) is the correct answer.

According to the Utility Theory,in "Consumer Equilibrium," Households Have _____