Learning Path
Question & Answer
Choose the Best Answer
Law of Demand
Principle of Equal Marginal Utility
Theory of Budget Constraints
Law of Diminishing Returns
Understanding the Answer
Let's break down why this is correct
When a shopper spends money, the best way to feel happiest is to keep the extra enjoyment from each dollar the same for every item. Other options are incorrect because The rule you think of is about how buying changes when price shifts; The idea of a budget limit is true, but it only tells you you cannot spend more than you have.
Key Concepts
Marginal Utility Per Dollar
medium level question
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Deep Dive: Marginal Utility Per Dollar
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Definition
Marginal Utility Per Dollar is a concept in Economics that helps consumers maximize utility by considering the additional satisfaction gained from spending one more dollar on each good. In this scenario, the consumer chooses the combination of apples and oranges that provides the highest marginal utility per dollar spent within the budget constraint of $7, demonstrating rational consumer decision-making.
Topic Definition
Marginal Utility Per Dollar is a concept in Economics that helps consumers maximize utility by considering the additional satisfaction gained from spending one more dollar on each good. In this scenario, the consumer chooses the combination of apples and oranges that provides the highest marginal utility per dollar spent within the budget constraint of $7, demonstrating rational consumer decision-making.
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