If, for a Consumer, (MU_A/P_A) Is Greater Than (MU_B/P_B), Then

question 25

Multiple Choice

If, for a consumer, (MU_A/P_A) is greater than (MU_B/P_B) , then the consumer

• A) has an incentive to consume relatively more of good A, which will increase his/her MU_A.
• B) has an incentive to consume relatively more of good A, which will decrease his/her MU_A.
• C) has an incentive to consume relatively more of good B, which will increase his/her MU_B.
• D) has an incentive to consume relatively more of good B, which will decrease his/her MU_B.

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Definitions:

Periodic Inventory System

A periodic inventory system is an accounting method where inventory levels and the cost of goods sold are updated in the financial records at the end of an accounting period, not continuously.

Cost of Merchandise Sold

The total expense of buying or manufacturing the goods sold by a business during a specific period.

Sales

The total amount of money received from selling goods or services over a specific period.

Periodic Inventory System

An inventory accounting system where updates to the inventory accounts are made at specific intervals, not continuously.