Figure 21-20 The Following Graph Illustrates a Representative Consumer's Preferences for Marshmallows

question 247

Multiple Choice

Figure 21-20
The following graph illustrates a representative consumer's preferences for marshmallows and chocolate chip cookies:
-Refer to Figure 21-20. Assume that the consumer has an income of $80. If the price of chocolate chips is $4 and the price of marshmallows is $4, the optimizing consumer would choose to purchase

• A)9 marshmallows and 6 chocolate chips.
• B)10 marshmallows and 10 chocolate chips.
• C)5 marshmallows and 5 chocolate chips.
• D)3 marshmallows and 9 chocolate chips.

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Definitions:

Price-Earnings Ratios

A financial metric used to evaluate the valuation of a company's stock, calculated as the market price per share divided by the earnings per share.

Earnings per Share

A company's net profit divided by its number of outstanding shares, indicating how much money each share makes in net income.

Annual Dividend

The total amount of dividends paid to shareholders over a year.

Share

A unit of ownership in a company or financial asset that represents a proportionate claim on its assets and earnings.