If a Consumer Reallocates His or Her Spending Away from Good

question 111

Multiple Choice

If a consumer reallocates his or her spending away from good B and towards good A, then the consumer's total utility will increase if:

• A)MU_A/P_A > MU_B/P_B
• B)MU_A/P_A < MU_B/P_B
• C)MU_A/P_A > 0 and MU_B/P_B > 0
• D)MU_A/P_A < 0 and MU_B/P_B < 0

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Definitions:

Goodwill Impairment

A decrease in the value of goodwill, which occurs when the carrying amount of a company's goodwill exceeds its fair value.

Consolidated Net Income

The total net income of a parent company and its subsidiaries after intercompany transactions have been eliminated.

Equity Method

An accounting technique used when a company invests in another company and has significant influence over it, allowing the investor to recognize a share of the investee's net income.

Impairment Loss

A reduction in the recoverable amount of a fixed asset or intangible asset below its book value, recognized as a loss in financial statements.