In Making Decisions About What to Consume, a Person's Goal

question 255

Multiple Choice

In making decisions about what to consume, a person's goal is to

• A)allocate her limited income among all the products she wishes to buy so that she receives the highest total utility.
• B)buy low-priced goods rather than high-priced goods.
• C)maximize her marginal utility from the goods and services she wishes to buy using her limited income.
• D)consume as many necessities as possible and then, if there is money left over, to buy luxuries.

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Definitions:

Red Herring

A preliminary prospectus filed by a company with the SEC, usually in connection with an initial public offering (IPO), that is subject to amendment.

Rights Offerings

An offer made by a company to its shareholders to purchase additional shares directly from the company at a specified price and within a specific time period.

Pure Rights Offerings

A method of raising capital in which a company offers existing shareholders the right to purchase additional shares directly, usually at a discount.

Price Drop

A decrease in the price of a commodity, security, or other financial instrument, often reflecting changes in demand and supply.