In Purchasing Diamonds and Water, a Consumer Would Maximize Utility

question 114

Multiple Choice

In purchasing diamonds and water, a consumer would maximize utility by

• A) dividing expenditure equally between those two goods
• B) equating the marginal utilities from each of those two goods
• C) equating average utility per diamond with average utility per unit of water
• D) equating the total utility per diamond with the total utility per unit of water
• E) equating marginal utility per dollar spent on each of those two goods

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