Suppose That a Consumer Is Currently at an Optimum When

question 340

Multiple Choice

Suppose that a consumer is currently at an optimum when consuming goods A and B. Which of the following must be TRUE?

• A) The total utility from A is equal to the total utility from B.
• B) The price of A is equal to the price of B.
• C) The marginal utility of A is equal to the marginal utility of B.
• D) The marginal utility to price ratio of A is equal to the marginal utility to price ratio of B.

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Definitions:

Revenue

The complete sum of revenue a business earns from sales of goods or provision of services within a designated timeframe.

Controlling Costs

The process of monitoring, managing, and regulating expenses to operate within the budget and maximize profitability.

Residual Income

The income that remains after deducting all required costs of capital and operating expenses, indicating the net income generated beyond the minimum rate of return.

Division Performance

An evaluation of the effectiveness and productivity of a specific division or segment within a company, often measured against pre-set targets or industry standards.