If the Marginal Utility of a Gallon of Milk to Consumers

question 126

Multiple Choice

If the marginal utility of a gallon of milk to consumers is $2.50 and the MC of producing the gallon of milk is $1.50, then

• A)the value of the resources used up in producing one more gallon of milk would be $1 less than the money value of the additional gallon to consumers.
• B)society could be made better off by expanding the output of milk.
• C)resources are not being used most efficiently.
• D)All of the above are true.

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Definitions:

Book Balance

refers to the current balance in a company’s accounting records, not including any pending transactions that have not yet been cleared or settled.

Net Collection Float

The time difference between when a check is deposited and when the funds are available in the firm's account, affecting available cash.

Net Disbursement Float

The time difference between when a check is issued by a company and when the funds are actually withdrawn from the company's bank account.

Outstanding Checks

Checks that have been written and recorded in the account ledger but not yet cashed or cleared by the bank.