Suppose You Have Spent Your Entire Budget And, for All

question 154

Multiple Choice

Suppose you have spent your entire budget and, for all the goods you purchase, the marginal utilities per dollar spent are identical.Which of the following is true?

• A)You are being irrational.
• B)You can increase your utility by reallocating your income.
• C)You will reduce your utility if you allocate income in any other way.
• D)You are minimizing your marginal utility.
• E)You can avoid diminishing marginal utility.

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Definitions:

Cash Break-even

The point at which a business generates just enough revenue to cover its operating cash expenses, without generating profit.

Fixed Costs

Fixed costs are expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Output Produced

The total amount of goods and services produced by an entity during a specific period.

Fixed Costs

Expenses that do not change with the amount of goods or services produced by a business, such as rent, salaries, and insurance.