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Consumer is trying to maximize his total utility if at a certain consuming amout:

a) marginal utility is equal to 0 b) marginal utility is equal to his total utility c) marginal utility divided by price is equal to 0 d) marginal utility is maximal e) marginal utility is equal to the price

Only one of these options is correct, which one is it? :-)

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  • $\begingroup$ This has nothing to do with martingales. What have you tried so far? $\endgroup$
    – Michael Greinecker
    Jan 13, 2012 at 17:21
  • $\begingroup$ Is this a question or a quiz? $\endgroup$
    – M Turgeon
    Jan 13, 2012 at 22:18

1 Answer 1

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The maximum of $X$ is attained when marginal $X$ is $0$. Also known as "equate the derivative to zero". Hence, (a) is correct. So is (c), for that matter.

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