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Course: AP??/College Microeconomics?>?Unit 1
Lesson 6: Marginal analysis and consumer choice- Marginal utility and total utility
- Visualizing marginal utility MU and total utility TU functions
- Total Utility and Marginal Utility
- Utility maximization: equalizing marginal utility per dollar
- Marginal utility free response example
- Marginal benefit AP free response question
- Utility Maximization
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Utility Maximization
Problem
Nate is currently spending his entire budget on two goods: food and entertainment. He was willing to pay for the last unit of food he purchased and for the last unit of entertainment he purchased.
Which of the following is the best explanation of why he is willing to pay so much more for entertainment?