Asked by Duval Demps on Jul 25, 2024
Verified
When a consumer shifts purchases from X to Y, the marginal utility of X falls and the marginal utility of Y rises.
Marginal Utility
Marginal utility is the additional satisfaction or benefit received by consuming one more unit of a good or service, often decreasing as consumption increases.
- Recognize how consumers maximize utility within the constraints of their budget.
Verified Answer
JO
JILLIAN OZELLOJul 29, 2024
Final Answer :
False
Explanation :
When a consumer shifts purchases from X to Y, the marginal utility of X rises (because they are consuming less of X and thus value the next unit more) and the marginal utility of Y falls (because they are consuming more of Y and thus value the next unit less).
Learning Objectives
- Recognize how consumers maximize utility within the constraints of their budget.
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