Marginal Utility Theory Assumes That When Sally Consume Less of a Good

question 53

Multiple Choice

Marginal utility theory assumes that when Sally consume less of a good that she was previously consuming more than one unit of, her

• A) total utility increases.
• B) marginal utility increases.
• C) income increases.
• D) total utility is maximized.

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Definitions:

Traditional Cost System

A costing method that allocates overhead costs based on a single volume-based cost driver, such as labor hours or machine hours.

Purchase Order

A document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.

Batch-level Activity

Refers to tasks that are performed each time a batch is processed, affecting multiple units of product but not directly correlated to each individual unit.

Departmental Overhead Rates

Specific rates used to allocate overhead costs to products or services based on the expenses incurred by different departments.