The Utility-Maximizing Rule Says That Consumers Must

question 183

Multiple Choice

The utility-maximizing rule says that consumers must

• A) only allocate the entire available budget.
• B) only make the marginal utility per dollar the same for all goods.
• C) allocate the entire available budget and make the marginal utility per dollar the same for all goods.
• D) either allocate the entire available budget or make the marginal utility per dollar the same for all goods, but not both.
• E) None of the above answers is correct.

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Definitions:

Inverse Function

A function that reverses the effect of the original function, such that applying both the function and its inverse will return the original input.

Graph

A drawing that portrays the network of relations or connections between various items through the use of distinct features like dots, lines, and bars.

Inverse Function

A function that reverses the operations of a given function, such that applying both functions in succession results in the original value.

Square Root

The value that, when multiplied by itself, yields the original number; it is denoted as \(\sqrt{x}\) for a number \(x\).