Consumers Maximise Total Utility Within Their Budget Constraint by

question 192

Multiple Choice

Consumers maximise total utility within their budget constraint by

• A) buying the cheapest goods they can find.
• B) buying whatever they like the best.
• C) buying the goods with the largest marginal utility per dollar spent.
• D) spending the same dollar amount for each good.

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Definitions:

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that suppliers are willing to offer for sale.

Consumer Surplus

The imbalance between the funds consumers are willing to dedicate to a good or service and the funds they actually dedicate.

Consumer Surplus

The discrepancy in the total spend consumers are willing to shoulder for a product or service as opposed to what they actually disburse.

Market Price

The present value at which a service or asset is available for purchase or sale in a market.