We Are Maximizing Our Utility When the ______ of Each

question 50

Multiple Choice

We are maximizing our utility when the ______ of each good and service we purchase is equal to ______.

• A)total utility;its price
• B)marginal utility;its price
• C)marginal utility;one
• D)total utility;one

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Definitions:

Pareto Optimal Allocation

A distribution of resources in an economy where improving the situation of one person necessitates detriment to another.

Utility Function

A mathematical representation of how a consumer ranks different bundles of goods based on their level of satisfaction or utility.

Endowed

Refers to the initial allocation of goods, resources, or wealth an individual or entity possesses.

Units

Measurements used to quantify physical quantities, such as kilograms for mass or meters for length.