Final answer:
Consumers should choose an amount of current spending and savings so that the marginal utility per dollar is equal for both, as this achieves the highest total utility given their budget constraint. This economic principle ensures efficient resource allocation for maximum benefit. the correct option is b.
Step-by-step explanation:
In deciding between consuming more goods now or saving money, consumers should choose an amount of current spending on goods and savings so that the marginal utility per dollar of both are equal. This principle is rooted in the concept of utility maximization, where individuals aim to achieve the highest possible satisfaction from their spending given their budget constraints. According to general economic theory, when the marginal utility per dollar spent is the same for both goods and savings, the utility-maximizing choice has been reached. This occurs because consumers are efficiently allocating their resources to gain the maximum benefit from each dollar spent, whether for immediate consumption or future savings.
The utility-maximizing choice on a consumption budget constraint can be found in several ways. Adding up total utility and choosing the highest total, comparing marginal utility gains and losses from different points, or applying the rule that the ratio of marginal utility to price should be equal for both options at the optimal choice are all methods consumers can use. In essence, it's about balancing the present and future utility to find the most satisfying allocation of spending and savings.