Suppose a Consumer Who Purchases Only Two Goods Is Making

question 67

Multiple Choice

Suppose a consumer who purchases only two goods is making a utility-maximizing choice and then the price of one of the goods decreases.What will happen?

• A)The consumer's purchasing power will increase.
• B)The consumer's total utility will increase.
• C)The consumer's money income will increase.
• D)both a and b
• E)all of the above

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Definitions:

Indirect Labor Cost

Wages and related expenses for workers who assist in or facilitate the production process but do not directly work on the product.

Direct Materials Cost

The expenditure on raw materials that are directly traceable to the production of a specific product.

Direct Labor Cost

Expenses associated with employees who directly contribute to the production of goods, such as wages for assembly-line workers.

Cost of Goods Manufactured

The sum of all expenses associated with the creation of finished goods within a given time frame, encompassing wages, raw materials, and indirect costs.