Sue Is Maximizing Her Utility

question 86

Multiple Choice

Sue is maximizing her utility. Her MUx/Px = 10 and MUy = 40. Then the price of Y must be

• A) $1.
• B) $4.
• C) $10.
• D) $40.

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Definitions:

Operating Expenses

Expenses incurred from a company's primary business activities, excluding cost of goods sold, such as rent, salaries, and utility bills.

Gross Profit

The difference between revenue and the cost of goods sold, before deducting overhead, payroll, taxation, and interest.

Cost of Goods Sold

Cost of goods sold is the direct costs attributable to the production of the goods sold by a company, including material and labor expenses.

Gross Profit Rate

The ratio of gross profit to net sales, expressed as a percentage, indicating the efficiency of a company in managing its direct costs.