A Consumer Maximizes Total Utility from a Given Amount of Income

question 89

Multiple Choice

A consumer maximizes total utility from a given amount of income when the

• A) Marginal utility obtained from the last dollar spent on each good is the same.
• B) Marginal utility of the last unit of each good is the same.
• C) Total utility obtained from each product is the same.
• D) Amount spent for each product is the same.

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Definitions:

Utility Function

A model that assigns numerical values to different bundles of goods, reflecting the satisfaction or utility these bundles provide to a consumer.

Gasoline Demanded

The total amount of gasoline consumers are willing and able to purchase at a given price within a specified period.

Buick Owner

A person who owns a vehicle manufactured by Buick, which is a division of the American automobile manufacturer General Motors.

Dodge Owner

A person or entity that owns a vehicle manufactured by Dodge, an American brand of automobiles.