A Consumer Has Maximized His or Her Utility by Consuming

question 234

Multiple Choice

A consumer has maximized his or her utility by consuming

• A) at the midpoint of the budget constraint line.
• B) at the midpoint of the demand curve.
• C) so that the total utility of all goods consumed is the same.
• D) so that the ratio of marginal utility to price is the same for all goods consumed.

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Definitions:

Goodwill

The intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets.

Straight-Line Method

A method of calculating depreciation of an asset by evenly spreading the cost over its useful life.

Extraordinary Repairs

Major repairs or expenditures that significantly prolong the useful life of an asset, beyond normal maintenance.

Annual Depreciation

The amount of an asset's cost allocated as an expense each year over its useful life, reflecting wear and tear or obsolescence.