Total Utility Is Maximized in the Consumption of Two Goods

question 31

Multiple Choice

Total utility is maximized in the consumption of two goods by

• A)equating the marginal utility for each good consumed.
• B)equating the marginal utility per dollar for each good consumed.
• C)equating the total utility of each good divided by its price.
• D)maximizing expenditure on each good.

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Definitions:

Adjusting Entries

Adjusting entries are journal entries made at the end of an accounting period to update income and expense accounts and ensure that the financial statements reflect the accrual basis of accounting.

Cash Account

A financial account that records cash transactions, including receipts and payments, showing the cash balance available at any given time.

Adjusting Entries

Accounting entries made at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.

Accounting Errors

Mistakes made in recording financial transactions or preparing financial statements.