Which of the Following Statements Is Always True When Determining

question 144

Multiple Choice

Which of the following statements is always true when determining the consumer optimum?

• A) Maximizing utility does not take budget restraints into consideration.
• B) Maximizing utility is easy if you are considering only two goods.
• C) Maximizing utility requires the marginal utility per dollar to be equal for each good consumed.
• D) Maximizing utility requires the total utility per dollar to be equal for each good consumed.
• E) Maximizing utility requires the marginal utility to be equal for each good.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowing funds; this expense is reported on the income statement.

Stated Interest Rate

The nominal interest rate stated on a financial instrument, such as a loan or bond, without adjustment for compounding or market conditions.

Carrying Amount

The value at which an asset is recognized on the balance sheet after deducting accumulated depreciation and impairment losses.

Market Rate of Interest

The prevailing rate of interest for securities or loans in the market, determined by supply and demand and influenced by the general economic conditions.