The Prices Per Pound of Apples, Pears, and Grapes Are

question 160

Multiple Choice

The prices per pound of apples, pears, and grapes are $1.50, $2, and $2.50, respectively. Clara's marginal utils for the last pound bought of each is 40 MU for apples, 45 MU for pears, and 50 MU for grapes. If Clarissa wants to maximize utility out of her limited budget for fruit, she should buy

• A) the same mix of apples, pears, and grapes.
• B) more apples and fewer grapes.
• C) more pears and fewer apples.
• D) more grapes and fewer pears.

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Definitions:

Investment Account

A financial account held at a financial institution that holds securities, cash, and other assets for investment purposes.

Goodwill

An asset without physical form that is generated when one company buys another at a price greater than the fair value of the acquired company's net assets that can be identified.

Equity Method

The equity method is an accounting technique used to record investments in associate companies, where the investment is initially recognized and subsequently adjusted for the investor's share of the net profits or losses of the investee.

Intra-entity Transactions

Financial transactions that occur within the same legal entity, or between divisions within a single company.