In Order to Maximize Utility, a Consumer Should Allocate Money

question 418

Multiple Choice

In order to maximize utility, a consumer should allocate money income so that

• A) the marginal utility of the last unit of each product consumed is greater than the total utility of each product consumed.
• B) the total utility derived from each product consumed is the same.
• C) the marginal utility obtained from the last dollar spent on each product is the same.
• D) the elasticity of demand on all products purchased is the same.

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Definitions:

Payroll Costs

The total amount of wages, salaries, and other compensation a business pays to its employees.

Accounting Costs

Costs recognized in the financial statements, consisting of both explicit costs like wages and materials, and allocated costs such as depreciation.

Allocated

Refers to the distribution or assignment of resources, costs, or expenses to various departments, projects, or activities.

Over Budget

A situation in which actual spending exceeds the planned or allocated budget.