Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Price
B
Satisfaction
C
Budget
D
Utility per Dollar
Understanding the Answer
Let's break down why this is correct
Answer
Apples represent the total utility you get from buying a good. In the analogy, oranges stand for the measure that tells you how much extra satisfaction you receive for each dollar spent on that good. That measure is the marginal utility per dollar. Thus the missing term is “Marginal Utility Per Dollar. ” For example, if buying an orange gives you 10 units of satisfaction for a $2 cost, its marginal utility per dollar is 5.
Detailed Explanation
For oranges, the key idea is how much satisfaction you get for every dollar spent. Other options are incorrect because Thinking about the money you pay for each orange is not enough; Contentment alone ignores how much money it costs.
Key Concepts
Marginal Utility Per Dollar
Consumer Decision-Making
Budget Constraint
Topic
Marginal Utility Per Dollar
Difficulty
medium level question
Cognitive Level
understand
Practice Similar Questions
Test your understanding with related questions
1
Question 1To maximize utility given a budget constraint, a consumer should allocate spending such that the marginal utility per dollar spent on each good is equal to the marginal utility per dollar spent on other goods. This principle is known as the __________.
mediumEconomics
Practice
2
Question 2If a consumer finds that the marginal utility per dollar spent on apples is greater than that of oranges, what is the most likely cause of this effect?
easyEconomics
Practice
3
Question 3If a consumer is maximizing utility with a budget of $20, which combination of apples and oranges maximizes total utility given the marginal utilities and prices?
mediumEconomics
Practice
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