Suppose That a Homeowner Notices a 20 Percent Increase in the Water

question 4

Multiple Choice

Suppose that a homeowner notices a 20 percent increase in the water bill for July. The homeowner traces this increase to four sources: a running toilet, a dripping faucet, a guest who visited for two days, and a broken sprinkler head. Further study shows that the broken toilet accounts for 8 percent of the increase, the faucet 2 percent, and the visiting guest 4 percent. The homeowner concludes that the remaining 8 percent is attributable to the broken sprinkler head. What method did the homeowner use in drawing this conclusion?

• A) The method of agreement.
• B) The joint method of agreement and difference.
• C) The method of difference.
• D) The method of residues.
• E) The method of concomitant variation.

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Definitions:

Marginal Benefit

The supplementary value derived from the consumption of an extra unit of a good or service.

Interest-Rate Cost-Of-Funds

This refers to the expense incurred by institutions when borrowing funds, influenced by the current interest rates.

Marginal Cost-Of-Funds

The additional cost of obtaining one more unit of funding.

Investment Projects

Initiatives undertaken by individuals or firms involving the expenditure of resources with the expectation of future financial returns.