Economists Describe Consumer Choice as a Constrained Optimization Problem

question 60

Multiple Choice

Economists describe consumer choice as a constrained optimization problem. What is the consumer trying to do?

• A)Maximize income subject to the budget constraint.
• B)Maximize the budget constraint.
• C)Maximize utility subject to the budget constraint.
• D)Minimize spending.

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Definitions:

Machine Hours

A measure of the amount of time a machine is operated, used as a basis for allocating factory overhead costs to products.

Standard Cost

A predetermined cost of manufacturing a product or performing a service, used as a benchmark to measure performance.

Direct Labor

The cost of the work performed by employees directly involved in manufacturing a product or providing a service.

Time Variance

The gap between the time actually needed to accomplish a task and the time that was anticipated for it.