The Consumer's Optimal Choice Is the One in Which the Marginal

question 62

Multiple Choice

The consumer's optimal choice is the one in which the marginal utility per dollar spent on good X

• A)is equal to the marginal utility per dollar saved on good X.
• B)is greater than the marginal utility per dollar spent on good Y.
• C)is equal to the marginal utility per dollar spent on good Y.
• D)is less than the marginal utility per dollar spent on good Y.

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Definitions:

Incentive

A thing that motivates or encourages someone to do something, often a reward that induces positive or desired behavior.

External Stimulus

An event or factor outside the body that influences an individual's physiological or psychological response.

Drive-Reduction

A psychological theory that posits the reduction of physiological needs drives behavior, aiming to reduce the state of tension or arousal caused by unmet needs.

Homeostasis

The process by which a living organism or cell maintains stable internal conditions despite changes in its external environment.