Use the Following to Answer Question

question 302

Multiple Choice

Use the following to answer question:
-(Table: Utility from Pizza and Beer) Look at the table Utility from Pizza and Beer. At All-Sports Bar, a bottle of beer costs $4; a slice of pizza costs $2. Denard has $10 to spend on beer and pizza. To maximize his utility, Denard will consume _____ slice(s) of pizza and _____ bottle(s) of beer.

• A) 5; no
• B) 3; 1
• C) 1; 2
• D) 4; 3

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Definitions:

Overhead

Overhead refers to the ongoing business expenses not directly tied to creating a product or service but necessary for the business's operations, such as rent, utilities, and salaries.

Law of Diminishing

Refers to the Law of Diminishing Returns, which states that adding more of one factor of production, while holding others constant, will at some point yield lower per-unit returns.

Marginal Returns

The change in output resulting from a one-unit increase in a particular input, while holding other inputs constant.

Marginal Cost

The rise in overall expenses associated with the production of an extra unit of a product or service.