Asked by Ferhat Butun on Jul 18, 2024
Verified
When a consumer is maximizing total utility,he or she cannot increase total utility by reallocating expenditures among different products.
Total Utility
The overall satisfaction or happiness received from consuming a certain amount of goods or services.
Reallocating Expenditures
The process of adjusting the distribution of spending across different areas or categories to better align with financial goals or constraints.
- Recognize the utility-maximizing choices of consumers within budget constraints.
Verified Answer
SS
spicy sanduneJul 18, 2024
Final Answer :
True
Explanation :
When a consumer is maximizing total utility, he or she is already allocating expenditures in the most optimal way to maximize total utility. Therefore, any reallocation of expenditures would result in a decrease in total utility, rather than an increase.
Learning Objectives
- Recognize the utility-maximizing choices of consumers within budget constraints.