Question: Why is a consumers satisfaction maximized when the marginal benefit from the last dollar spent on one good is equal to the marginal benefit from

Why is a consumer’s satisfaction maximized when the marginal benefit from the last dollar spent on one good is equal to the marginal benefit from the last dollar spent on another good?

Step by Step Solution

★★★★★

3.58 Rating (190 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The marginal benefit from each additional dollar s... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

723-B-E-M-E (5049).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Suppose the marginal cost of writing a contract of length L is MC(L) = 10 + 2L. Find the optimal contract length when the marginal benefit of writing a contract is: a. MB(L) = 100. b. MB(L) = 150. c....

Suppose the marginal cost of writing a contract of length L is MC (L) = 20 + 5L. Find the optimal contract length when the marginal benefit of writing a contract is: a. MB (L) = 120. b. MB (L) = 180....

Suppose that new machines cost $504, and the marginal benefit from new machines is MB = 246 6K, where K is the number of machines purchased. The depreciation rate is 15% and the dividend yield is...

Why is a consumers satisfaction maximized when the marginal benefit from the last dollar she spent on one good is equal to the marginal benefit from the last dollar she spent on another good?

4. Why is a consumers satisfaction maximized when the marginal benefit from the last dollar she spent on one good is equal to the marginal benefit from the last dollar she spent on another good?

Why is a consumers satisfaction maximized when the marginal benefit from the last dollar she spent on one good is equal to the marginal benefit from the last dollar she spent on another good?

QUESTION 1 Consider two goods, squash racquets and gym passes. If the price of gym passes increases and, as a consequence, the demand curve for racquets shifts to the left, then A. squash racquetsand...

Why is a consumers satisfaction maximized when marginal benefit from the last dollar she spent on one good is equal to the marginal benefit from the last dollar she spent on another good?

In contrast to perfect competition, a: monopoly produces more at a lower price. monopoly produces where MR > MC. monopoly may have lower economic profits in the long run. monopoly produces less at a...

Multiple choice questions. Please provide explanations as well; Questions 18 and 19 refer to the following Daybreak graph which shows the cost and revenue curves for a typical firm operating in a No...

Of a random sample of 100 college students, 35 expected to achieve a higher standard of living than their parents, 43 expected a lower standard of living, and 22 expected about the same standard of...

The candy making department at MyChocoCrush Company provides you with the following information for October. All direct materials are placed in process at the beginning of production. The facts are:...

the current market price of a share of a stock is 8 0 . if a put option on this stock has a strike price of 7 5

What is meant by credit terms? What are the expected effects of (a) a decrease in the cash discount, and (b) a decrease in the credit period?

1. The -industry argument is often given to provide a rationale for tariffs for new firms. 2. Knowledge gained during production is known as by doing. 3. If only one firm can exist in a market, a...

One disadvantage of using accounts receivable as collateral for borrowing money is a. there is a cost involved as interest will be charged on the loan. b. there is more risk involved than using a...

Laurel, Inc., has debt outstanding with a coupon rate of 6.2% and a yield to maturity of 6.9%. Its tax rate is 25%. What is Laurel's effective (after-tax) cost of debt? NOTE: Assume that the debt has...

Travelling Salesman Problem (TSP) Example Homework - Unanswered Due Jan 22nd, 11:59 PM What is the cost of optimal solution to the Travelling Salesman Problem for this graph, assuming starting vertex...