Asked by
Antonio Dumitrasconiu
on Dec 11, 2024
Verified
If Mr. Smith thinks the last dollar spent on shirts yields more satisfaction than the last dollar spent on cola, and Smith is a utility-maximizing consumer, he should
A) decrease his spending on cola.
B) decrease his spending on cola and decrease his spending on shirts.
C) decrease his spending on shirts.
D) increase his spending on cola and decrease his spending on shirts.
Utility-Maximizing
The process of adjusting consumption of goods and services to achieve the highest possible level of satisfaction or utility.
Satisfaction
Describes the feeling of fulfillment or pleasure that comes from acquiring or consuming a product or service.
- Comprehend the function of marginal utility in guiding optimal consumer choices.
- Elucidate the importance of marginal utility in behaviors aimed at maximizing utility.
Verified Answer
AC
Learning Objectives
- Comprehend the function of marginal utility in guiding optimal consumer choices.
- Elucidate the importance of marginal utility in behaviors aimed at maximizing utility.