Asked by Nicholas Boren on Apr 25, 2024
A consumer is maximizing her utility with a particular money income when
A) the total utility derived from each product consumed is the same.
B) MU a/ Pₐ = MU b/ Pᵦ = MU c/ Pc = . . . = MU n/ Pₙ .
C) MU a = MU b = MU c = . . . = MU n.
D) Pₐ = Pᵦ = Pc = . . . = Pₙ .
Utility Maximization
The process by which consumers adjust their consumption to get the highest level of satisfaction from their available resources.
MU/P Ratio
The ratio of marginal utility (the additional satisfaction from consuming one more unit of a good) to its price, often used in consumer choice theory to maximize utility.
- Investigate the practices of consumer behavior and the maximization of utility.
- Discover the circumstances enabling consumers to reach maximal utility.
Learning Objectives
- Investigate the practices of consumer behavior and the maximization of utility.
- Discover the circumstances enabling consumers to reach maximal utility.