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

question 53

Multiple Choice

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

-Mr. Rational has $27 that he plans to spend purchasing 5 units of good X (priced at $3 per unit) and 6 units of good Y (priced at $2 per unit) . The marginal utility of the fifth unit of X is 30, and the marginal utility of the sixth unit of Y is 30. If Mr. Rational is a utility maximizer, he should:

• A)not buy anything.
• B)buy more of X and less of Y.
• C)buy less of X and more of Y.
• D)buy X and Y in the quantities indicated.
• E)buy less of X and even lesser than that of Y.

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Definitions:

Materials Price Variance

The difference between the actual cost of materials and the expected cost based on standard pricing, used to evaluate cost management.

Purchasing Department

A division within a business that is responsible for acquiring goods and services needed for operations.

Standard Cost

A predetermined cost of manufacturing a product or providing a service, used for budgeting and performance evaluation.

Predetermined Cost

An estimated cost calculated in advance of production, used for budgeting and cost control purposes.