If Marlowe Obtains 9 Units of Utility Per Dollar Spent

question 119

Multiple Choice

If Marlowe obtains 9 units of utility per dollar spent on apples and 6 units of utility per dollar spent on oranges, then Marlowe

• A)is maximizing total utility.
• B)should buy more apples and fewer oranges.
• C)should buy more oranges and fewer apples.
• D)should buy fewer oranges and fewer apples.

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Definitions:

Break-even Sales

The amount of revenue needed to cover both fixed and variable costs, resulting in zero net income or loss.

Variable Costs

Expenses that change in proportion to the activity or volume of production or sales, such as raw materials and direct labor.

Break-even Point

The point at which total revenues equal total expenses, indicating that a business is neither making a profit nor incurring a loss.

Variable Costs

Expenses that change in proportion to the activity of a business, such as material or labor costs related to production levels.