Answer to Question #291531 in Macroeconomics for Nalyn

Question

Explain the utility-maximizing rule of a consumer.

Answer 1

The essence of the utility maximization rule is as follows: the consumer's income should be distributed in such a way that the last dollar spent on each product or service brings equal marginal utility. The marginal utility of each good or service divided by his or her price should be the same for all goods and services.