The table given below reports the total utility derived by an individual from the consumption of different units of goods A, B, and C.Table 7.4

-A consumer is in equilibrium when:
A)his or her marginal utility derived from each good is maximized.
B)each dollar spent on each item provides more and more satisfaction.
C)each dollar spent on each item provides less and less satisfaction.
D)the last dollar spent on each item provides the same additional satisfaction as that dollar would if spent on any other item.
E)his or her average utility for each item is the same.

Question

The table given below reports the total utility derived by an individual from the consumption of different units of goods A, B, and C.Table 7.4
 
-A consumer is in equilibrium when:
A)his or her marginal utility derived from each good is maximized. 
B)each dollar spent on each item provides more and more satisfaction. 
C)each dollar spent on each item provides less and less satisfaction. 
D)the last dollar spent on each item provides the same additional satisfaction as that dollar would if spent on any other item. 
E)his or her average utility for each item is the same.

Quizplus · Accepted Answer

A consumer is in equilibrium when the marginal utility per dollar spent on each item is equal across all items. This means that the consumer has allocated their budget in such a way that they cannot increase their total utility by reallocating their spending.

The Table Given Below Reports the Total Utility Derived by an Individual