For a Consumer to Maximize Utility from a Given Income

question 112

Multiple Choice

For a consumer to maximize utility from a given income,

• A)the marginal utility from each good must be maximized.
• B)the total utility from each good must be maximized.
• C)the marginal utilities of all goods and services consumed must be equal.
• D)the marginal utility per dollar from all goods and services consumed must be equal.
• E)the amount of each good consumed per dollar must be equal.

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Definitions:

Risk-Free

Pertaining to an investment with guaranteed returns and negligible risk of financial loss.

Economic Profits

Profits or losses calculated by considering both explicit costs, such as direct expenses, and implicit costs, like opportunity costs.

Arbitrage Opportunity

The opportunity to buy an asset at a low price in one market and sell it for a higher price in another, exploiting price discrepancies.

Investment Portfolio

Set of securities chosen by an investor.