Asked by
Manuel Alejandro
on Dec 11, 2024
Verified
If Noah thinks the last dollar spent on belts yields more satisfaction than the last dollar spent on socks, and Smith is a utility-maximizing consumer, he should
A) decrease his spending on socks.
B) decrease his spending on socks and increase his spending on belts.
C) increase his spending on belts.
D) increase his spending on socks and decrease his spending on belts.
Utility-Maximizing
The economic principle where individuals or firms make choices that lead to the highest level of satisfaction or profit.
Satisfaction
The fulfillment or gratification of a need, desire, or appetite, often used in the context of consumer experiences with goods or services.
- Understand the role of marginal utility in determining optimal consumption decisions.
- Explain the significance of marginal utility in utility-maximizing behavior.
Verified Answer
LG
Learning Objectives
- Understand the role of marginal utility in determining optimal consumption decisions.
- Explain the significance of marginal utility in utility-maximizing behavior.