For a Consumer to Maximize Utility from a Given Income

question 112

Multiple Choice

For a consumer to maximize utility from a given income,

• A)the marginal utility from each good must be maximized.
• B)the total utility from each good must be maximized.
• C)the marginal utilities of all goods and services consumed must be equal.
• D)the marginal utility per dollar from all goods and services consumed must be equal.
• E)the amount of each good consumed per dollar must be equal.

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Definitions:

Quantity Theory of Money

This economic theory posits that the general price level of goods and services is directly proportional to the amount of money in circulation.

Velocity of Money

The rate at which money circulates in the economy, typically measured as the ratio of GDP to the money supply.

Money in Circulation

The total amount of money, including cash and coins, that is in active use and circulating within an economy.

Real GDP

Represents the total value of all goods and services produced within a country adjusted for inflation, indicating the actual growth of an economy.