The State Department of Agriculture Raised the Minimum Price for a Gallon

question 193

Multiple Choice

The state Department of Agriculture raised the minimum price for a gallon of milk in the city on Tuesday to $4.37. "If you've got two or three kids and you're living on a fixed income and you're paying half your income on rent," Gioia said, "then you're really in a bind and you're making choices you should never have to make." If even after this price increase Gioia's marginal utility per dollar is higher for milk than for other goods, what should Gioia do?

• A) increase her consumption of milk
• B) decrease her consumption of milk
• C) not change her consumption of milk
• D) increase her consumption of milk only if her income increases

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Definitions:

Direct Expenses

Costs that can be precisely linked to the production or sale of particular goods or services, crucial for setting product prices.

Salaries

The regular payments made by an employer to an employee, often expressed as an annual sum.

Indirect Advertising

is a form of advertising where the message is not directed toward the product or service but rather establishes a broader brand identity.

Gross Sales

The total sales revenue of a company, before any deductions for returns, allowances, or discounts.