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An Optimizing Consumer Has to Choose Between Two Goods: Good

question 95

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An optimizing consumer has to choose between two goods: Good A priced at PA and Good B priced at PB.Given that MBA is the marginal benefit from consuming Good A and MBB is the marginal benefit from consuming Good B,the consumer's well-being will be maximized at the point where ________.


Definitions:

Investment

The allocation of resources, such as capital or time, into something with the expectation of generating income or profit in the future.

Consumption

The action of using goods and services for personal needs or wants.

Annual Variations

Fluctuations in economic indicators or values that occur on a yearly basis due to various factors such as seasonal patterns or cyclical trends.

Disposable Income

Households’ financial capacity for savings and expenditure after income tax obligations are met.

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