Use the Following to Answer Questions

question 163

Multiple Choice

Use the following to answer questions:
-(Table: Consumer Equilibrium) Look at the table Consumer Equilibrium. Assume that the price of good X is $2 per unit and the price of good Y is $1 per unit, that you consume three units of good X and three units of good Y, and that you are spending all of your income. To maximize utility, assuming that the goods are divisible, you would consume _____ of X and _____ of Y.

• A) less; less
• B) more; more
• C) less; more
• D) more; less

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Definitions:

Direct Labor

The wages and benefits paid to employees who are directly involved in the production of goods or services.

Standard Costs

Predetermined costs for manufacturing goods, used as benchmarks to measure performance.

Average Cost

The total cost divided by the number of units, used to calculate cost of goods sold and ending inventory valuation.

Work in Process

Inventory that includes materials that are currently being processed into finished goods but are not yet complete.