A Consumer Maximizes Total Utility from a Given Amount of Income

question 89

Multiple Choice

A consumer maximizes total utility from a given amount of income when the

• A) Marginal utility obtained from the last dollar spent on each good is the same.
• B) Marginal utility of the last unit of each good is the same.
• C) Total utility obtained from each product is the same.
• D) Amount spent for each product is the same.

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Definitions:

NonTaxable Income

Income that is not subject to taxation by the IRS or state tax authorities; examples include certain gifts, inheritances, and some types of insurance payouts.

Compensation

This represents payment or benefits provided to an employee or executive by an employer for services rendered.

Injuries

Physical harm or damage to a person's body.

Life Insurance Proceeds

The money paid out by a life insurance company to the beneficiary upon the insured's death.