Abby Maximizes Utility by Allocating Time Among Leisure, Market Work

question 162

Multiple Choice

Abby maximizes utility by allocating time among leisure, market work, and nonmarket work so that the

• A)total utility of each is equal
• B)average utility of each is equal
• C)total utility per hour of each is equal
• D)marginal utility per hour of each is equal
• E)maximum amount of goods and services can be acquired

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Definitions:

Cost Principle

Accounting principle that requires assets, services, and goods to be recorded at their original cost rather than their current market value.

Cost Principle

An accounting principle that states transactions and assets should be recorded at their original purchase cost, factoring out any market value changes.

Revaluing Assets

The process of adjusting the book value of an asset to reflect its current market value rather than its original purchase price.

Major Disadvantage

A significant or principal drawback that adversely affects the effectiveness, efficiency, or desirability of an object, system, or method.