A Consumer Maximizes His or Her Utility When Expenditures Are

question 95

Multiple Choice

A consumer maximizes his or her utility when expenditures are allocated such that

• A) the utility received per dollar spent on the last unit of each good is equal.
• B) the total number of dollars spent on each good is equal.
• C) the utility received from the last unit of each good is equal.
• D) the marginal utility is zero for each good consumed utility.
• E) the total utility from each good is equal.

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Definitions:

Departmental Overhead Rate

The rate at which indirect costs are allocated to different departments within a company, often used for costing purposes.

Direct Labor Hours

The total number of hours worked by employees directly involved in manufacturing a product or providing a service, often used in calculating labor cost and efficiency.

Machine Hours

A measure of the amount of time a machine is operated, used in costing to allocate expenses based on how long a machine has been in use.

Setup Cost Per Unit

The cost associated with configuring or preparing equipment for manufacturing a batch of products, divided by the number of units produced.