Table 10-4 -Refer to Table 10-4.For Steak and Cheese Sandwiches and Grilled

question 71

Multiple Choice

Table 10-4

-Refer to Table 10-4.For steak and cheese sandwiches and grilled chicken sandwiches, the table contains the values of the marginal utility (MU) and marginal utility per dollar (MU/P) for Mabel Jarvis.Mabel has $14 to spend on steak and cheese sandwiches and grilled chicken sandwiches.Which of the following statements is true?

• A)If Mabel maximizes her utility, she will buy three steak and cheese sandwiches and two grilled chicken sandwiches.
• B)If Mabel was maximizing her utility when spending $14 and then received an additional $4, she would receive the most marginal utility per dollar if her next purchase was another grilled chicken sandwich.
• C)Mabel will first buy two steak and cheese sandwiches; then with her remaining $6 she will buy three grilled chicken sandwiches.
• D)To maximize her utility, Mabel will need a total of $36, the income needed to buy 6 steak and cheese sandwiches and 6 grilled chicken sandwiches.

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Definitions:

Minimum Lease Payments

The lowest amount that a lessee is expected to pay over the lease term for the right to use an asset.

Current Ratio

The current ratio is a liquidity metric that evaluates a company's ability to pay off its short-term liabilities with its short-term assets.

Capital Lease

A lease agreement in which the lessee records the leased asset as if it were purchased.

Operating Lease

A contract in which the ownership of the asset remains with the lessor while the lessee has the right to use the asset, without the option to purchase, for a certain period.