Asked by Elizabeth Inyang on Jun 12, 2024

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At the optimal consumption bundle:

A) the marginal utility of all goods consumed is equal.
B) the marginal utility per dollar spent is equalized across all goods consumed.
C) the price of all goods consumed is equal.
D) total utility from all goods consumed is equal.

Optimal Consumption

The point at which a consumer maximizes their satisfaction or utility from consumption under their budget constraints.

Marginal Utility

Marginal utility is the additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service.

Dollar Spent

A unit of expenditure, often used to discuss the impact or value of spending in terms of economic activity or investment.

  • Assimilate the concept of equal marginal utility per dollar as essential for utility maximization.
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MB
Muhammed BamneJun 14, 2024
Final Answer :
B
Explanation :
At the optimal consumption bundle, the consumer has maximized their utility subject to their budget constraint by allocating their spending in such a way that the marginal utility per dollar spent on each good is equal. This is known as the principle of equal marginal utility per dollar spent. It ensures that the consumer is getting the most satisfaction from their spending and is making the most efficient use of their budget.