If a Consumer Has Allocated His or Her Budget and Found

question 152

Multiple Choice

If a consumer has allocated his or her budget and found the combination of goods where all marginal utilities divided by price are equal,what would happen if the consumer were forced to consume some other combination of goods? The consumer

• A) will definitely have higher total utility.
• B) will definitely have lower total utility.
• C) will definitely not experience any change in total utility.
• D) might be have higher, lower, or the same total utility, but more information is needed to determine which.
• E) None of the above answers is correct.

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Definitions:

60-Day Note

Definition: A financial instrument, or promissory note, that requires the borrower to pay back the principal balance along with any interest in 60 days.

Maturity Value

The total amount payable to an investor at the end of a debt security's life, including both the principal and any accrued interest.

Interest Rate

The percentage charged by a lender to a borrower for the use of assets, typically expressed as an annual percentage of the principal.

Uncollectible Account

A receivable owed to a company that is considered unlikley to be paid and is written off as a loss.