When a Consumer Spends Income So That the Ratio of Marginal

question 100

Multiple Choice

When a consumer spends income so that the ratio of marginal utilities (MUs) of all goods purchased equals the ratio of their prices, the consumer is

• A)maximizing marginal utility
• B)spending too much on all goods
• C)maximizing total utility
• D)beyond the point of diminishing marginal utility
• E)behaving in opposition to the principal of rational behavior

Analyze the perspectives on poverty and the concept of socioeconomic status in the context of American society.

Distinguish between internal and international stratification.

Understand the methodology and importance of class analysis in the study of sociology and stratification.

Familiarize with the concepts of poverty threshold, poverty rate, and their determinants and implications.

---

Definitions:

Debt-equity Ratio

A measure used to assess a company's financial leverage, calculated by dividing its total liabilities by its shareholder equity.

Weighted Average Cost of Capital

The rate that a company is expected to pay on average to all its security holders to finance its assets, weighting the cost of each source of capital (equity, debt, etc.) by its proportion in the capital structure.

Optimal Capital Structure

The ideal mix of debt and equity financing that minimizes a company's cost of capital and maximizes shareholder value.

Weighted Average Cost of Capital

A calculation of a firm's cost of capital that weights each category of capital proportionally, including equity and debt.