Suppose That the Price of a Pizza Is $10 and That

question 71

Multiple Choice

Suppose that the price of a pizza is $10 and that the price of a blouse is $30.At her present level of consumption,Magda's ratio of marginal utility of pizza to marginal utility of blouses is 1/2.To maximize total utility,she should

• A)buy more pizzas and fewer blouses
• B)buy fewer pizzas and more blouses
• C)continue to buy the same quantities of pizza and blouses
• D)spend more time consuming pizza
• E)spend more time buying blouses

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Definitions:

Ordinary Gain

A profit resulting from business operations or the sale of assets, excluding extraordinary items and discontinued operations.

Extraordinary Gain

A gain resulting from events or transactions that are both unusual in nature and infrequent in occurrence, separated from regular business operations.

Fair Market Value

The price at which an asset would sell in the market under conditions where buyers and sellers are acting freely, informed, and without undue pressure.

Book Value

The net value of a company's assets as listed on the balance sheet, calculated as total assets minus intangible assets (like goodwill) and liabilities.