Exhibit 6-8 Bea's Total Utility of 3-Minute Telephone Calls -Refer to Exhibit 6-8

question 229

Multiple Choice

Exhibit 6-8 Bea's total utility of 3-minute telephone calls $$\begin{array} { | c | c | } \hline \begin{array} { c } \text { Quantity of } \\\text { 3-Minute Calls }\end{array} & \begin{array} { c } \text { Total Utility of } \\\text { Telephone Calls }\end{array} \\\hline 0 & 0 \\1 & 15 \\2 & 28 \\3 & 38 \\4 & 45 \\5 & 50 \\6 & 48 \\\hline\end{array}$$
-Refer to Exhibit 6-8. Diminishing returns set in after which telephone call?

• A) The first.
• B) The second.
• C) The third.
• D) The fifth.
• E) The sixth.

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Definitions:

Tax-Free

Tax-free describes goods, transactions, or income that are not subject to taxation by the government.

Taxed

Subjected to a financial charge or levy by a government on income, goods, or activities.

Progressive Tax

A tax system in which the tax rate increases as the taxable amount increases, resulting in those who have higher incomes being taxed at a higher rate.

Progressive Tax

A taxation system where the tax rate increases as the taxable amount or income increases.