When Utility Derived from Many Goods Is Multiplied or Divided

question 146

Multiple Choice

When utility derived from many goods is multiplied or divided by any number, the new utility measure indicates

• A)a different set of preferences for the highest and the lowest quantities of goods consumed, but the same preferences for the middle quantities.
• B)the same preferences as before.
• C)a different set of preferences only for the highest quantities of goods consumed.
• D)a different set of preferences only for the lowest quantities of goods consumed.
• E)an entirely different set of preferences.

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Definitions:

Sales Dollars

Sales dollars refer to the total monetary value of all sales transactions made by a company over a period, without deducting any costs or expenses.

Break-Even Point

The sales level at which a business generates revenue equal to its expenses, resulting in neither profit nor loss.

Variable Costs

Financial obligations that shift depending on the level of manufacturing or sales activity.

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, like lease payments and wages.