Utility Is Maximized in the Consumption of Two Goods by Equating

question 34

Multiple Choice

Utility is maximized in the consumption of two goods by equating the:

• A) marginal utility of one good to the price of the other.
• B) ratios of marginal utility to price for both goods.
• C) ratios of total utility to price of both goods.
• D) marginal utilities of both goods.

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Definitions:

Diencephalon

A division of the brain located between the cerebral hemispheres and brainstem, encompassing structures such as the thalamus and hypothalamus.

Midbrain

The middle portion of the brainstem that plays a role in vision, hearing, motor control, sleep/wake, arousal (alertness), and temperature regulation.

Epithalamus

A portion of the diencephalon in the brain, involved in linking the limbic system to other parts of the brain and regulating hormones and circadian rhythms.

Habenula

The habenula is a small region in the brain involved in regulating sleep-wake cycles, reproductive behavior, and stress responses.