When Chris Maximizes His Total Utility,then His Entire Available Budget

question 61

Multiple Choice

When Chris maximizes his total utility,then his entire available budget is allocated in such a way that the

• A) marginal utility of all goods is equal.
• B) marginal utility per dollar is equal for all goods.
• C) marginal utility is as large as possible for goods.
• D) marginal utility will start decreasing if it consumes fewer goods.
• E) quantities consumed of each good are equal.

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Definitions:

Marginal Product

Marginal product refers to the additional output generated by employing one more unit of a specific factor of production, holding all other factors constant.

Labor

The exertion of mental or physical strength by humans to create goods and services.

Fixed Cost

Fixed cost refers to a cost that does not change with the level of goods or services produced by a business over a certain period.

Production

The creation or manufacture of goods and services with the combination of labor, equipment, technologies, and raw materials.