If Total Utility Can Be Increased by Purchasing a Little

question 82

Multiple Choice

If total utility can be increased by purchasing a little more milk and a little less ice cream, the:​

• A)marginal utility of milk is greater than that of ice cream
• B)marginal utility of ice cream is greater than that of milk
• C)ratio of marginal utility of milk to its price is greater than that of ice cream
• D)ratio of marginal utility of milk to its price is lesser than that of ice cream
• E)marginal utility of ice cream is negative

---

Definitions:

Income

Financial gains obtained regularly as a result of working or investing.

Imputed Interest Rules

IRS rules that assign a market-rate interest value to certain transactions where no interest or an unrealistic amount of interest is charged.

Personal Residence

A dwelling where an individual lives for the majority of the tax year, which can include a house, apartment, trailer, or boat.

Sale of Property

The act of transferring ownership of real estate or personal property from one party to another for a price.