The Below Table Shows the Average Utility (In Utils) Obtained

question 13

Multiple Choice

The below table shows the average utility (in utils) obtained from the consumption of goods A and B.Table 7.3

-The equimarginal principle illustrates:

• A)that consumers are essentially robots.
• B)that people behave irrationally.
• C)that people behave in rather consistent ways in order to maximize happiness.
• D)that people behave in rather inconsistent ways.
• E)that people will spend all their incomes.

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Definitions:

Contribution Format Income Statement

A format for income statements that divides fixed and variable expenses, emphasizing the margin of contribution.

Traditional Format Income Statement

A type of income statement where expenses are deducted from revenues to calculate net income, typically divided into operating and non-operating sections.

Fixed Selling Expense

refers to selling costs that do not vary with the volume of sales, including salaries of sales personnel and advertising expenses.

Variable Selling Expense

Variable selling expense refers to costs that fluctuate with the volume of sales, such as commissions and shipping charges.