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Author Question: As a consumer allocates income between good A and good B, total utility is maximized when a. the ... (Read 49 times)

809779

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on: Jul 1, 2018
As a consumer allocates income between good A and good B, total utility is maximized when
 a. the marginal utility of A = the marginal utility of B
  b. the marginal utility of A = the marginal utility of B = 0
  c. the price of A = price of B
  d. marginal utility of A/price of A = marginal utility of B/price of B = 0
  e. marginal utility of A/price of A = marginal utility of B/price of B

Question 2

When a consumer spends income so that the ratio of marginal utilities (MUs) of all goods purchased equals the ratio of their prices, the consumer is
 a. maximizing marginal utility
  b. spending too much on all goods
  c. maximizing total utility
  d. beyond the point of diminishing marginal utility
  e. behaving in opposition to the principal of rational behavior


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Christopher

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Reply #1 on: Jul 1, 2018
Answer to Question 1

E

Answer to Question 2

C


809779

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Reply 2 on: Jul 1, 2018
Wow, this really help

Liamb2179

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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