If a consumer has a budget of $7, how should they allocate their spending between apples and oranges to maximize their satisfaction?

To maximize satisfaction a consumer should compare the marginal utility per dollar for each fruit, which is the extra satisfaction gained from spending one more dollar on that fruit. The consumer keeps buying the fruit that gives the highest marginal utility per dollar until the marginal utility per dollar of the next dollar spent on one fruit is less than or equal to that of the other fruit. For example, if apples give a marginal utility of 10 units per apple at a price of $1 (10 utility per dollar) and oranges give a marginal utility of 8 units per orange at a price of $2 (4 utility per dollar), the consumer should buy apples first. With a $7 budget, the consumer would buy 7 apples, spending $7 and achieving the highest total utility. If prices or utilities change, the consumer would re‑compare the marginal utility per dollar and adjust the mix accordingly.