Your Total Liabilities Excluding Mortgage Debt Should Not Exceed What

question 94

Multiple Choice

Your total liabilities excluding mortgage debt should not exceed what percentage of your net worth excluding the value of your home if you are to have a manageable level of debt?

• A)14
• B)18
• C)33
• D)50

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Definitions:

Marginal Utility

The additional satisfaction or benefit received by a consumer from consuming one more unit of a good or service.

Consumer Equilibrium

A state in microeconomics where a consumer achieves the highest satisfaction possible, given their income constraints and prices of goods and services.

Prices

The amount of money required to purchase a good or service, reflecting the value placed on it by the market.

MU/P

The ratio of marginal utility (MU) to price (P), representing the additional satisfaction gained per unit of currency spent.