Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Total Spending Limit
B
Maximum Quantity of Goods
C
Optimal Price Point
D
Average Cost of Goods
Understanding the Answer
Let's break down why this is correct
Answer
Marginal utility refers to the additional satisfaction or happiness a person gets from consuming one more unit of a good or service. Similarly, a budget constraint represents the limits on what a person can spend based on their income and the prices of goods. Just as marginal utility helps us understand how much extra satisfaction we gain from buying more, a budget constraint shows how much we can afford to buy given our financial limits. For example, if you have $10 and apples cost $2 each, your budget constraint allows you to buy up to 5 apples, but you have to consider how much satisfaction each apple brings you. Understanding both concepts helps people make smart choices about spending their money to maximize happiness.
Detailed Explanation
A budget constraint shows how much money you can spend. Other options are incorrect because Some might think a budget tells you how many items you can buy; People might confuse a budget with the best price for items.
Key Concepts
Marginal Utility
Budgeting
Resource Allocation
Topic
Marginal Utility and Budgeting
Difficulty
hard level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.