An Alternative Way of Looking at the Consumer's Utility Maximization

question 34

Multiple Choice

An alternative way of looking at the consumer's utility maximization decision is called duality in consumer theory, which consists in:

• A) looking at the optimum in consumption in terms of setting the marginal utilities equal to the ratio of prices rather than looking at the point where an indifference curve is tangent to a budget line.
• B) choosing the lowest budget line that touches a given indifference curve rather than choosing the highest indifference curve, given a budget constraint.
• C) constructing a Lagrangian multiplier instead of focusing on the equal marginal principle.
• D) decomposing the effects of a price change on consumption, without recourse to budget lines.

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