The Table Shows the Marginal Utility Schedules for Old Product

question 240

Multiple Choice

The table shows the marginal utility schedules for old product X and new product Y for a hypothetical consumer. The price of X is $2, and the price of good Y is $1. The budget of the consumer is $10. What is the increase in total utility from the original situation when purchasing just X, compared to now when the consumer purchases the utility-maximizing combination of both X and Y?

• A)10
• B)18
• C)60
• D)78

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Definitions:

Salvage Value

The estimated residual value of an asset at the end of its useful life, considered for depreciation calculations.

Working Capital Investment

Funds used by a company to finance its day-to-day operations, including investments in inventory and accounts receivable.

Net Present Value

The calculation used to determine the current value of a series of future cash flows by discounting them at a specific rate.

Cash Inflows

Any money coming into a company from various sources, including sales, financing, and investments.