If John's Marginal Benefit Derived from the Consumption of Another

question 114

Multiple Choice

If John's marginal benefit derived from the consumption of another candy bar is greater than the price of the candy bar,

• A) John will not purchase any more candy bars.
• B) John will increase his total satisfaction by purchasing the candy bar.
• C) the opportunity cost of the candy bar is lower than the price.
• D) John will decrease his total utility if he purchases the candy bar.

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Definitions:

Straight-Line Method

A method of calculating depreciation of an asset which spreads the cost evenly across the useful life of the asset.

Prior Period Adjustment

Adjustments made to the financial statements to correct errors or inaccuracies from previous periods.

Residual Value

The estimated salvage value an asset will have at the end of its useful life.

Manufacturing Equipment

Machinery and tools that are used in the process of producing goods in a manufacturing facility.