Tom Is Buying a Quantity of Wheat at Which the Marginal

question 101

Multiple Choice

Tom is buying a quantity of wheat at which the marginal utility (in dollars) exceeds price.He should

• A)reduce wheat consumption, thus raising P to the level at which MU = P.
• B)reduce wheat consumption, thus raising MU to the level at which MU = P.
• C)increase wheat consumption, thus raising P to the level at which MU = P.
• D)increase wheat consumption, thus lowering MU to the level at which MU = P.

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Definitions:

Stated Dividend

A fixed amount declared by a company's board of directors that is paid to shareholders, typically on preferred stock.

Par Value

The face value of a bond or a stock or the stated value per share, setting the minimum price at which shares can be issued.

Preferred Stock

Preferred Stock is a class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often with fixed dividends.

Stock Dividend

A payment made by a corporation to its shareholders in the form of additional shares, rather than cash, based on the proportion of shares they already own.