If a Person Is Consuming Two Goods,the Rational Spending Rule

question 146

Multiple Choice

If a person is consuming two goods,the rational spending rule requires that

• A) total expenditure on the two goods be equal.
• B) total utility from the two goods be equal.
• C) average utility from the two goods be equal.
• D) the extra utility from the last dollar spent on one good equals the extra utility from the first dollar spent on the other good.
• E) the ratio of marginal utility to price be equal for the two goods.