The Host at a Party Offers Justin a Sixth Beer

question 153

Multiple Choice

The host at a party offers Justin a sixth beer.Justin says, "No thanks, man.The marginal utility of that fifth beer was, like, 20 cents, but the marginal utility of the sixth would be minus 10 cents." If Justin consumes the sixth beer, his total utility will

• A)rise by 10 cents.
• B)reach a plateau and remain constant.
• C)fall by 10 cents.
• D)fall below his marginal utility.

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Definitions:

Partnership

A lawful business arrangement involving two or more people who divide both management responsibilities and earnings.

Proprietorship

A business owned and operated by a single individual, also known as a sole proprietorship.

Objectivity Concept

An accounting principle ensuring that financial statements are based on verifiable and unbiased evidence.

Financial Statements

Reports that summarize the financial performance and position of a business, including the income statement, balance sheet, and cash flow statement.