Jess Gets Half as Much Marginal Utility from an Additional

question 65

Multiple Choice

Jess gets half as much marginal utility from an additional bagel than from an additional muffin.If the price of muffin is $2.00/each,then Jess is maximizing utility if the price of a bagel is

• A)$1.00
• B)$1.50
• C)$2.00
• D)$4.00

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Definitions:

Payback Period

The length of time required to recover the cost of an investment.

Direct Materials

Materials that can be directly linked to the production of a product and represent a substantial portion of the cost.

Accounting Rate of Return

A financial metric used to assess the profitability of an investment, calculated as the average annual profit divided by the initial investment cost.

Annual Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues over a year.