Question

What is the formula for calculating total expenditure on two goods?

Options

• Total Spending = Income × Price

• Total Spending = (Food Units × Price of Food) + (Clothing Units × Price of Clothing)

• Total Spending = Units of Food + Units of Clothing

• Total Spending = Price of Food ÷ Price of Clothing

Answer 1

Total Spending = (Food Units × Price of Food) + (Clothing Units × Price of Clothing)

Explanation: 

The formula adds each good's units multiplied by its price to get the total spending.