Total utility is maximixed in the consumption of two goods by equating the  a.Prices of both goods for the last dollar spent on each good b.Marginal utilities of both goods for the last dollor spent on each good. d. Marginal utility of one good to the price of the other good.

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Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.