If a Consumer Buys Two Different Goods, the Rational Spending

question 110

Multiple Choice

If a consumer buys two different goods, the rational spending rule requires that the:

• A)total expenditure on the two goods be equal.
• B)ratio of total utility to price be equal for the two goods.
• C)ratio of average utility to price be equal for the two goods.
• D)ratio of marginal utility to price be equal for the two goods.

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Definitions:

Ultimate Reality

A concept in various philosophical and religious traditions referring to the most fundamental nature of existence, beyond which no further causal explanation can be sought.

Anaximander

An early Pre-Socratic philosopher from Miletus in Ionia, notable for his work in cosmology, geography, and biology.

Descartes

René Descartes, a 17th-century French philosopher, mathematician, and scientist, known for his statement "Cogito, ergo sum" (I think, therefore I am) and his contributions to modern philosophy and the development of rationalism.

Substances

Fundamental components or materials that constitute physical reality, having distinct and constant properties.