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If a Person Is Consuming Two Goods,the Rational Spending Rule

Question 146

Multiple Choice

If a person is consuming two goods,the rational spending rule requires that


A) total expenditure on the two goods be equal.
B) total utility from the two goods be equal.
C) average utility from the two goods be equal.
D) the extra utility from the last dollar spent on one good equals the extra utility from the first dollar spent on the other good.
E) the ratio of marginal utility to price be equal for the two goods.

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