Question

A consumer equilibrium is a situation in which a consumer has allocated​ _____ of her income in a way that​ _____. A. ​all; maximizes her marginal utility B. ​all; maximizes her total utility C. ​some; lowers her household budget D. ​some; increases her marginal utility

Answer 1

B) ​All; maximizes her total utility

Step-by-step explanation:

A consumer is said to be at equilibrium in a situation where he/she spends all his income in order to maximize utility(satisfaction) derive from a given goods and services. Equilibrium is that state where the money a person spends or allocate on goods and services equal the satisfaction a person derives spending that good. it has to be equal to be at an equilibrium state.

Answer 2

The correct answer is (D) all, maximizes her total utility.

Step-by-step explanation:

Consumer's equilibrium is a defined as a situation in which an individual uses his or her money to buy goods in a manner in which the person obtains the highest satisfaction and has no need for a change in the level of consumption on account of the price of the product.

Consumer equilibrum enables an individual to obtain complete satisfaction from his or her money. Consumer equilibrum is found by comparing the ratio of the marginal utility to the price of a commodity.