Assume That Diminishing Marginal Utility Applies to Both Coffee and Football

question 149

Multiple Choice

Assume that diminishing marginal utility applies to both coffee and football tickets and that the consumer is spending all of her income.If a consumer purchases a combination of coffee and football tickets such that MU_Coffee/ /P_Coffee = 20 and MU_{Football tickets}/ /P_{Football tickets} = 10,to maximize utility,the consumer should buy _____ coffee and _____ football tickets.

• A)less;more
• B)more;fewer
• C)more;more
• D)less;fewer

Understand the relationship between isocost lines and isoquants in optimizing production.

Identify the factors that cause shifts in isocost lines.

Understand how to interpret isocost lines in relation to the firm's costs of capital and labor.

Grasp the concept of optimal combination of capital and labor for a firm.

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Definitions:

Asset Accounts

Accounts that represent the different types of economic resources owned or controlled by a business, such as cash, inventory, and equipment.

General Ledger

A complete record of all financial transactions over the life of a company, serving as the primary source of information for the financial statements.

Chart of Accounts

A systematic listing of all accounts used by an organization, typically organized by type such as assets, liabilities, equity, revenues, and expenses.

Balance Column Journal

A type of accounting record that includes columns for recording dates, details of transactions, and corresponding debit or credit balances.