Assume That Diminishing Marginal Utility Applies to Both Dish Soap

question 181

Multiple Choice

Assume that diminishing marginal utility applies to both dish soap and floor wax and that Minh is spending all of her income.If Minh purchases a combination of dish soap and floor wax such that MU_{Dish soap}/ /P_{Dish soap} = 50 and MU_{Floor wax}/ /P_{Floor wax} = 30,to maximize utility,Minh should buy _____ soap and _____ floor wax.

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

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Definitions:

Supplies Account

An account in the general ledger that records the amount spent on supplies that are used in the operation of a business.

General Journal

A ledger where all financial transactions of a business are initially recorded using double-entry bookkeeping.

Purchases Journal

A financial journal used to record all purchases of goods and services on credit.

Return Supplies

Returned goods or materials that were previously purchased, which can reduce the payable amount or be exchanged for credit.