If the Marginal Utility of Each Good a Consumer Buys

question 115

Multiple Choice

If the marginal utility of each good a consumer buys does not diminish but remains constant, we should see consumers

• A)buying no goods at all
• B)spending all of their income on the good with the highest marginal utility
• C)buying one unit of each good
• D)buying only the least expensive good
• E)leaving the store in total confusion

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Definitions:

Medical Expense Deduction

A tax deduction allowed for unreimbursed medical expenses that exceed a certain percentage of the taxpayer's adjusted gross income.

Dependent

Dependent is a person, typically a child or elderly family member, whose support and maintenance are provided by another, qualifying the supporting individual for certain tax benefits.

Pease Limitations

Named after Congressman Don Pease, these are limits on the amount of itemized deductions that high-income individuals can claim.

Itemized Deductions

Expenses allowed by the IRS that can be deducted from adjusted gross income to reduce taxable income if chosen instead of the standard deduction.