Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Choosing the meal that provides the highest satisfaction per dollar spent.
B
Selecting the most expensive meal regardless of satisfaction.
C
Opting for the meal with the least calories.
D
Buying multiple cheaper meals without regard to satisfaction.
Understanding the Answer
Let's break down why this is correct
Answer
A consumer with a fixed income will pick the meal that gives the most satisfaction for each dollar spent. To see which meal maximizes utility, you divide each meal’s satisfaction by its price, giving the marginal utility per dollar. For example, if Meal A costs $10 and gives 30 units of satisfaction, its utility per dollar is 3; Meal B costs $15 with 40 units, giving about 2. 7; Meal C costs $20 with 45 units, giving about 2. 25.
Detailed Explanation
The correct choice is the one that gives the most extra happiness for each dollar spent. Other options are incorrect because Choosing the most expensive meal regardless of satisfaction assumes that price equals value; Opting for the meal with the least calories focuses on nutrition, not money use.
Key Concepts
Utility Maximization
Topic
Marginal Utility Per Dollar
Difficulty
easy level question
Cognitive Level
understand
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