A Consumer with a Fixed Income Will Maximize Utility When

question 314

Multiple Choice

A consumer with a fixed income will maximize utility when each good is purchased in amounts such that the

• A)total utility is the same for each good.
• B)marginal utility of each good is maximized.
• C)marginal utility per dollar spent is the same for all goods.
• D)marginal utility per dollar spent is maximized for each good.

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Definitions:

Option

A financial derivative that represents a contract giving the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified strike price on or before a specified date.

Employee Stock Options

A right, purchased from one party by another, granting the purchaser the option, but not the requirement, to either buy (call) or sell (put) a share at a pre-decided price during a specific timeframe or on a certain date.

Align Goals

The process of adjusting strategies or actions to ensure that various objectives or aims are in harmony or agreement.