Question

If a consumer always buys goods rationally, then

A) the total utilities of the different goods consumed will be equal.
B) the marginal utility of the different goods consumed will be equal.
C) the marginal utility per dollar spent on all goods will be equal.
D) the average utilities of the different goods consumed will be equal.

Answer 1

The correct answer is C) the marginal utility per dollar spent on all goods will be equal.

If a consumer always buys goods rationally, then the marginal utility per dollar spent on all goods will be equal.

When people try to buy rationally, their motives are based on good judgment. They test the product, compare prices or compare different companies' products taking into consideration, quality, accessibility, and duration.

The marginal utility is the extra satisfaction received from consuming one more unit of a product. When people consume more of a product during a determined time, the marginal utility is going to decline.