A Consumer Has Been Buying 4 Magazines and 3 Books

question 128

Multiple Choice

A consumer has been buying 4 magazines and 3 books a month for many months. The price of magazines then decreases, which directly causes the marginal utility per dollar spent on

• A) magazines to increase, thereby inducing the consumer to purchase fewer magazines and more books.
• B) magazines to increase, thereby inducing the consumer to purchase more magazines and fewer books.
• C) books to increase, thereby inducing the consumer to purchase fewer magazines and more books.
• D) books to decrease, thereby inducing the consumer to purchase fewer magazines and more books.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity of the company.

Financial Ratios

Quantitative measures derived from a company's financial statements used to evaluate its financial performance and health.

Financial Stability

The condition of having a strong financial foundation, characterized by the ability to withstand economic fluctuations and meet obligations without undue stress.

Operating Efficiency

The effectiveness with which a company utilizes its assets and resources to generate profits and minimize costs without sacrificing quality.