The "Equal Bang for the Buck" Idea Means That the Consumer

question 13

Multiple Choice

The "equal bang for the buck" idea means that the consumer is equating:

• A)the marginal utilities of all of the goods purchased.
• B)the prices of all the goods purchased.
• C)the marginal utilities of the last dollar spent on each good purchased.
• D)the ratios of the last dollar spent on each good purchased.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, which can include the cost of bonds, loans, or lines of credit.

Opportunity Costs

The potential benefits an individual, investor, or business misses out on when choosing one alternative over another.

Sunk Costs

Costs that have already been incurred and cannot be recovered.

Incremental Cash Flow

The additional cash flow a company receives from undertaking a new project, after accounting for the expenses involved in the project.