Question

Ricky is not in a consumer equilibrium. Given the prices of goods, Ricky has allocated all his income such that his marginal utility per dollar spent is ________ for ________ goods.

Answer 1

Answer:

The options are

A) as small as possible; all

B) equal; all

C) equal; normal

D) maximized; all

The answer is B) equal; all

Ricky not being in a consumer equilibrium and he considering the prices prices of goods means he allocated all his income in such a way that entails his marginal utility per dollar spent is equal for all goods.

This is to ensure that he cuts cost and maximizes his spending power.