Use the Indifference Curves and the Budget Lines in Figure

question 10

Multiple Choice

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.If the price per unit of good X is $1, the consumer would maximize utility by consuming

• A)25 units of Y.
• B)21 units of Y.
• C)15 units of Y.
• D)10 units of Y.

---

Definitions:

Pre-Tax Basis

An evaluation or measure made before taxes are deducted.

Marginal Cost

The change in total cost that arises when the quantity produced is incremented by one unit.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to shareholders, used for reinvestment in the business or to pay down debt.

After-Tax Cost

The actual cost of an investment or loan after taking into account the effects of taxation on its returns or costs.