The Following Table Shows Erica's Utility for Muffins and Grapefruit

question 93

Multiple Choice

The following table shows Erica's utility for muffins and grapefruit.

-Refer to the above information to answer this question.If Erica has a budget of $8 and the price of both muffins and grapefruit are $1,what will be her optimal purchase?

• A)1 muffin and 7 grapefruit.
• B)2 muffin and 6 grapefruit.
• C)3 muffins and 5 grapefruit.
• D)4 muffins and 4 grapefruit.
• E)5 muffins and 3 grapefruit.

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Definitions:

Notes Receivable

Claims against debtors that are supported by formal agreements or promissory notes, specifying the amounts owed and payment terms.

Discount On Notes Receivable

An amount deducted from the face value of a note to reflect the interest revenue over the term of the note.

Notes Receivable

Short-term or long-term financial assets representing amounts owed to the company that are documented through formal agreements or promissory notes.

Interest Revenue

This refers to the income that is earned from investments, loans, or savings accounts, essentially any source that pays interest.