Answered: A consumer with a fixed income will…

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A consumer with a fixed income will maximize utility when each good is purchased in amounts such that the:

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter6: Consumer Choice And Demand

Section: Chapter Questions

Problem 2QFR

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Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.

Question

A consumer with a fixed income will maximize utility when each good is purchased in amounts such that the:

a.marginal utility per dollar spent is maximized for each good.

b.marginal utility of each good is maximized.

c.marginal utility per dollar spent is the same for all goods.

d.total utility is the same for each good.

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