Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
True
B
False
Understanding the Answer
Let's break down why this is correct
Answer
When we talk about total utility, we mean the overall satisfaction or happiness we get from consuming goods. If two goods give us the same total utility but one is cheaper, it makes sense to buy more of the cheaper good because we can get the same satisfaction for less money. This way, we can save some of our budget or use that saved money to buy even more of the cheaper good or something else we enjoy. For example, if you can get 10 units of satisfaction from a $5 pizza or a $10 burger, choosing the pizza allows you to spend less while getting the same level of happiness. Thus, by allocating more of your budget to the cheaper good, you maximize your overall satisfaction and make your money go further.
Detailed Explanation
It's not always best to buy more of the cheaper good. Other options are incorrect because This answer suggests that price is the only thing that matters.
Key Concepts
Marginal Utility
Budgeting
Resource Allocation
Topic
Marginal Utility and Budgeting
Difficulty
hard level question
Cognitive Level
understand
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