As More of a Good Is Consumed, TOTAL Utility

question 75

Multiple Choice

As more of a good is consumed, TOTAL utility

• A) remains the same.
• B) increases.
• C) might change but whether or not it changes depends on why more of the good is consumed.
• D) becomes negative and then turns positive.
• E) decreases.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or volume of output.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums, providing a basis for operational planning.

Operating Profit

Earnings before interest and taxes (EBIT), representing the profit a company makes from its operations after subtracting operating expenses from revenue.

Sales Mix

The proportion of different products or services that make up the total sales of a company.