When a Consumer Spends Income So That the Ratio of Marginal

question 100

Multiple Choice

When a consumer spends income so that the ratio of marginal utilities (MUs) of all goods purchased equals the ratio of their prices, the consumer is

• A)maximizing marginal utility
• B)spending too much on all goods
• C)maximizing total utility
• D)beyond the point of diminishing marginal utility
• E)behaving in opposition to the principal of rational behavior

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Definitions:

Muscles

Tissues in the body that have the ability to contract, thus enabling movement and support of various body functions.

Joints

The locations at which two or more bones connect, facilitating movement and providing support to the skeletal structure.

Kinesthetic

Relating to kinesthesia, which is the sense that detects bodily position, weight, or movement of the muscles, tendons, and joints.

Perception

The cognitive process of interpreting sensory information to represent and understand the environment around us.