Joanna Is Deciding Between Consuming Good X and Good Y

question 54

Multiple Choice

Joanna is deciding between consuming Good X and Good Y.At her current level of consumption,her marginal utility per dollar for Good X is greater than the marginal utility per dollar for Good Y.To achieve the consumer optimum,Joanna needs to

• A) consume more of Good Y until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X.
• B) consume more of Good X until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X.
• C) consume more of both Good X and Good Y until the marginal utility per dollar for Good Y is greater than the marginal utility for Good X.
• D) consume more of Good X or less of Good Y until the marginal utility per dollar for Good X and Good Y is equal.
• E) continue at her current level of consumption.

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Definitions:

Bad Debt Expense

The cost associated with accounts receivable that a company is not able to collect.

Interest

The cost of borrowing money or the compensation received by lenders, usually expressed as an annual percentage rate.

Maturity Value

The total amount payable to an investor at the end of a fixed-term investment, including the principal and any accrued interest.

Adjusting Entry

An entry made in the accounting records at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.