A Consumer's Utility Is Maximized When

question 83

Multiple Choice

A consumer's utility is maximized when:

• A) the dollar amount spent on each good is the same.
• B) the marginal utility of each good purchased is the same.
• C) the price of each good is the same.
• D) None of the above are generally true.

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Definitions:

Average Total Costs

The total costs of production (fixed plus variable costs) divided by the total quantity of output produced, indicating the average cost per unit of product.

Perfect Competitor

A hypothetical firm in a market structure characterized by many sellers, selling homogeneous products, and having no control over the market price.

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for the adjustment to changes in market conditions or demand.

Output

The total amount of goods and services produced by an economic system or by a single firm within a certain period.