If consumption is unconstrained, the utility is maximized when:
a. The marginal utility of the last unit consumed approaches infinity,
b. The cost of the last unit consumed equals zero,
c. The cost of the last unit consumed approaches infinity,
d. The marginal utility of the last unit consumed equals zero.
The proportion of earnings that is not consumed by the individuals is termed as investment. The individuals invest in the market for earning the interest on investment. An increase in the market investment level will attract more individuals to make investment and it affects the interest rate in the market.
Answer and Explanation: 1
The correct answer is d. The marginal utility of the last unit consumed equals zero.
This is the correct answer because at the maximum utility level,...
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fromChapter 3 / Lesson 10
Learn about marginal utility and how it is calculated. Explore the basics of marginal utility, the marginal utility equation, and how it is applicable in economics.