If Raul's Marginal Utility Per Dollar from Bread Is 25

question 46

Multiple Choice

If Raul's marginal utility per dollar from bread is 25 and the marginal utility per dollar from butter is 30,

• A) rail should purchase more butter and less bread to increase his total utility.
• B) Raul's marginal utility from butter will fall if he buys more butter.
• C) Raul's marginal utility from bread will rise if he buys less bread.
• D) Only answer B and answer C are correct.
• E) Answer A, answer B, and answer C are correct.

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Definitions:

Manufacturing Costs

The total expense involved in the manufacture of a product, including direct materials, direct labor, and manufacturing overhead.

Product Costs

Costs that are directly attributable to the creation of products including direct labor, direct materials, and manufacturing overhead.

Lean Production

A management approach that organizes resources such as people and machines around the flow of business processes and that only produces units in response to customer orders.

Inventories

Items such as raw materials, work-in-progress, and finished goods that a company holds for sale in the ordinary course of business.