Joseph Chooses a Combination of Apples and Oranges Along His

question 172

Multiple Choice

Joseph chooses a combination of apples and oranges along his budget line.The marginal rate of substitution of apples in place of oranges is 2, the price of an apple is $0.50, and the price of an orange is $0.50.Joseph:

• A)is maximizing total utility.
• B)should consume more apples and fewer oranges to maximize total utility.
• C)should consume fewer apples and more oranges to maximize total utility.
• D)may or may not be maximizing total utility.

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Definitions:

Income Statement

A financial statement that shows a company's revenues, expenses, and profits over a specified period of time, indicating the financial performance of the business.

Gross Profit

The difference between sales and the cost of goods sold, representing the fundamental earning efficiency of a company's core activities.

Payroll Expense

The total amount of money a business pays to its employees as wages or salaries, including taxes and benefits, for a specific period.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company.