The Below Table Shows the Average Utility (In Utils) Obtained

question 48

Multiple Choice

The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3

-In economic theory, the idea of the equimarginal principle, or consumer equilibrium, means:

• A)consumers appear to be similar in their buying habits, which explains why prices are almost always in equilibrium.
• B)to maximize utility, consumers allocate all of their incomes among goods so as to equate the total utility of all units of goods purchased.
• C)to maximize utility, consumers must allocate their scarce incomes among only the cheapest products available.
• D)to maximize utility, consumers must allocate their scarce incomes among goods so as to equate the marginal utilities per dollar of expenditure on the last unit of each good purchased.
• E)the marginal utilities among luxury goods are always equal among certain high-income earners.

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Definitions:

Product Costs

Expenses directly tied to the creation of products, including direct materials, direct labor, and factory overhead.

Factory Overhead Cost

All indirect costs associated with manufacturing, including utilities, maintenance, and manager salaries, but not direct materials or direct labor.

Manufacturing Process

The series of steps through which raw materials are transformed into a final product, involving both physical or chemical procedures.

Direct Costs

Expenses that can be directly attributed to the production of specific goods or services, such as raw materials and labor.