What is the utility-maximizing rule?
What will be an ideal response?
The utility-maximizing rule states that for a person to maximize utility, the person must allocate (spend) his or her entire budget and consume the quantities of goods and services so that the marginal utility per dollar from each good or service is equal to the marginal utility per dollar from all the other goods and services.
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Explain two reasons why economic forecasting can only be of limited use
Borrowing VCU3 from an online company cause the nation's:
a. Monetary base to rise. b. M2 money supply to rise. c. M2 money multiplier to remain the same. d. M2 money supply to fall.
Refer to Figure 6.1. Assume that L1 represents the budget line before a price change. Point B represents the:
A. uncompensated effect of an increase in the price of bread.
B. uncompensated effect of a decrease in the price of soup.
C. uncompensated effect of an increase in the price of soup.
D. compensated effect of an increase in the price of soup.
If the United States government were to impose a quota on wristwatches imported from Switzerland, then the
A. price of wristwatches in the United States would decrease and total quantity consumed (domestic and imported) would increase. B. price of wristwatches in Switzerland would rise, and Switzerland would be hurt by the quota. C. total quantity of wristwatches (domestic and imported) consumed would decline as prices rise. D. price of wristwatches in the United States would remain the same, but the quantity consumed would fall as imports fall.