-John Either Buys a Steak or Chicken When Dining Out

question 259

Multiple Choice

-John either buys a steak or chicken when dining out. John's marginal utility for steak and chicken is given in the above table. If the price of a steak is $10 and the price of a chicken is $5 and John has $25 to spend on the two goods, what combination of steak and chicken will John consume to maximize his utility?

• A) 0 steak and 5 chickens
• B) 1 steak and 3 chickens
• C) 2 steaks and 1 chicken
• D) 3 steaks and 2 chickens

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Definitions:

Planning Budget

A budget prepared for a specific level of activity, often used in flexible budgeting to adjust for various activity levels.

Containers Refurbished

The process of cleaning, repairing, and restoring used containers to a usable condition for the same or a new purpose.

Other Expenses

Costs not directly tied to the production of goods or services, including administrative and office expenses.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels of the company.