Bob's Marginal Utility for Consuming Beer and Pizza with $8

question 282

Multiple Choice

Bob's Marginal Utility for consuming beer and pizza with $8.00 in income

-Referring to the above table, suppose Bob's ratios of marginal utility of beer to the price of beer and the marginal utility of pizza to the price of pizza are equal. If the price of beer increases

• A) Bob will probably consume more beer and less pizza.
• B) Bob will probably consume less beer and less pizza.
• C) Bob will probably consume less beer and more pizza.
• D) Bob will still consume the same amount of beer and pizza.

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Definitions:

Adjusting Entry

At the close of an accounting cycle, records are made in the accounting books to apportion earnings and expenditures to the actual period of occurrence.

Gallons

A unit of volume for liquid measurements in the United States, equivalent to 3.785 liters.

Mineral Rights

The legal rights to explore, extract, and sell minerals from a piece of land.

Depletion Rate

A method of accounting for the reduction of a product's reserves, such as natural resources, calculating the expense of extracting or using those resources over a period.