NABTEB Economics 2025 Objective — Question 36

Question 36 of 60 from the National Business and Technical Examinations Board (NABTEB) Economics 2025 Objective paper, with the correct answer and a full explanation.

A rational consumer maximizes utility where:

A. mux/px = mux/px
B. mux/px = py/mux
C. py/mux = mux/px

Explanation

Consumer equilibrium occurs where the marginal utility per dollar spent is equal across all goods (the equi-marginal principle): mux/px = muy/py.

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