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As a general rule, utility-maximizing choices between consumption goods occur where the: rise in income has created the greatest utility. price ratio and marginal utilities ratio of two goods is equal.
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As a general rule, utility-maximizing choices between consumption goods occur where the: rise in income has created the greatest utility. price ratio and marginal utilities ratio of two goods is equal. higher-income households have the greatest satisfaction. constraints on budget expenditures has fallen substantially. NEXT

User Omar Ali
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Answer: Option (B) is correct.

Step-by-step explanation:

Correct Option: Price ratio and marginal utilities ratio of two goods is equal.

Utility maximizing choices occur where the ratio of the price of two goods is equal to the ratio of the marginal utilities of two goods.

Utility maximization rule states that individuals wants to allocate their money income in a way, so that the consumer can get same amount of additional marginal utility from spending the last penny on each good.

Therefore,


(P_(x) )/(P_(y)) = (MU_(x) )/(MU_(y))

User DunderChief
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