-In the Above Figure, Which of the Following Statements Is

question 244

Multiple Choice

-In the above figure, which of the following statements is TRUE? I. The consumer maximizes utility by consuming at point A.
II) The marginal rate of substitution at point B and point A are equal because they are on the same budget line.

• A) only I
• B) only II
• C) both I and II
• D) neither I nor II

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Definitions:

Variable Costing

An accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, with fixed overhead expenses charged against income in the period they are incurred.

Variable Costing

A methodology in accounting that includes only fluctuating production costs (such as direct materials, direct labor, and variable manufacturing overhead) in the pricing of items.

Unit Product Cost

The total cost associated with manufacturing a single unit of product, inclusive of materials, labor, and overhead.

Net Operating Income

The profit a company has after subtracting its operating expenses from its revenue, excluding interest and taxes.