The Fact That a Gallon of Gasoline Commands a Higher

question 148

Multiple Choice

The fact that a gallon of gasoline commands a higher market price than a gallon of water indicates that

• A) gasoline is an economic good but water is not.
• B) the marginal utility of gasoline is greater than the marginal utility of a gallon of water.
• C) the average utility of a gallon of gasoline is greater than the average utility of a gallon of water.
• D) the total utility of gasoline exceeds the total utility of water.

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Definitions:

Recognized Gross Profit

Gross profit that has been realized and reported in the financial statements of a company, calculated as sales revenue minus the cost of goods sold.

Periodic Cash Proceeds

Periodic cash proceeds refer to the regular amounts of money received by a business over a specified period, such as from sales or investments.

Market Price Method

A valuation method for inventory or assets based on current market prices.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.