If a Consumer Is Maximizing His/her Utility for a Given

question 21

Multiple Choice

If a consumer is maximizing his/her utility for a given income, the:

• A) marginal utility for every good purchased would be the same.
• B) marginal utility per dollar spent for all goods would be the same.
• C) marginal utility per dollar for all goods would be at a maximum.
• D) total expenditure on each good would be the same.

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Definitions:

Capital Investment Proposals

Plans or suggestions put forward for consideration regarding the investment of capital into long-term assets or projects expected to provide benefits over multiple periods.

Time Value of Money Concept

The idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Dollar Today

The current value of the US dollar against a basket of foreign currencies, affecting import and export prices.

Equal Cash Flow

Recurrent inflow or outflow of cash that is the same in amount for each period.