Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A → B → C → D
B
B → A → C → D
C
C → D → A → B
D
D → C → B → A
Understanding the Answer
Let's break down why this is correct
Answer
To maximize utility within a budget constraint, you start by calculating the marginal utility per dollar for each good. This means you look at how much extra satisfaction you get from spending one more dollar on each item. Next, you compare these values across all the goods to see which ones give you the most satisfaction for your money. After that, you allocate your budget to the goods that have the highest marginal utility per dollar, ensuring you get the most enjoyment from your spending. Finally, you assess the total utility gained from the chosen consumption bundle to see if you are satisfied with your choices.
Detailed Explanation
First, you calculate how much satisfaction each good gives you for each dollar spent. Other options are incorrect because This option suggests comparing before calculating; This option skips the important step of comparing values.
Key Concepts
Marginal Utility
Budgeting
Resource Allocation
Topic
Marginal Utility and Budgeting
Difficulty
medium level question
Cognitive Level
understand
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