A consumer maximizes utility when the marginal utility per rupee spent is:
Correct answer: A. Equal for all goods purchased
- A. Equal for all goods purchased
- B. Greater for the most expensive good
- C. Equal to total utility from each good
- D. Greater for the good bought in largest quantity
Explanation
At an interior utility maximum, the marginal utility gained from the last rupee spent is equal across goods. If it were higher for one good, the consumer could increase utility by reallocating spending toward it.
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About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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