If a Person Is Receiving Greater Marginal Utility Per Dollar

question 55

Multiple Choice

If a person is receiving greater marginal utility per dollar from consuming one good than another, it follows that he or she is

• A)maximizing disutility.
• B)not maximizing utility.
• C)maximizing utility.
• D)There is not enough information to answer the question.

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Definitions:

Fixed Costs

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance premiums, remaining constant regardless of business activity.

Marginal Costs

The expense incurred by manufacturing an extra unit of a product or service.

Fixed Costs

Expenses that do not vary with the level of output or sales, such as rent, insurance, and salaries, distinguished by their consistency.

Marginal Costs

The extra cost incurred by producing one additional unit of a product.