If a Consumer Must Spend Her Entire Income on Some

question 67

Multiple Choice

If a consumer must spend her entire income on some combination of two commodities and chooses to spend it all on just one of the commodities then:

• A) the other commodity is an economic bad.
• B) the other commodity must have zero marginal utility.
• C) the other commodity generates less utility per dollar spent on the good.
• D) the two commodities must be perfect substitutes.

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Definitions:

Safety Inventory

A buffer stock kept to protect against variability in demand or supply, ensuring sufficient product availability.

Capacity

The maximum output that a system, facility, or machine can produce under normal conditions over a given period.

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Sophisticated software solutions designed to optimize supply chain operations, from resource planning to production and distribution.

Computing Power

The capacity of a computer system to perform or process data, usually measured in terms of speed and computational ability.