If Mr McLean Thinks the Last Dollar Spent on Bowling Yields

question 37

Multiple Choice

If Mr. McLean thinks the last dollar spent on bowling yields more satisfaction than the last dollar spent on hamburgers, and McLean is a utility-maximizing consumer, he should

• A) bowl less, so the marginal satisfaction from expenditures in this area will increase.
• B) spend more on hamburgers, so total satisfaction from that activity will increase.
• C) eliminate spending on hamburgers.
• D) bowl more and spend less on hamburgers.

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Definitions:

Grow

To grow or expand in size, volume, or intensity as time progresses.

Annual Rate

The interest rate for a loan or investment over the span of one year.

Simple Interest

Interest calculated only on the principal amount, not on the interest accrued.

Invested

The maneuver of allocating finances with the aspiration of earning income or profit.