If an Individual's Demand Is Elastic and Price Increases, What

question 9

Multiple Choice

If an individual's demand is elastic and price increases, what happens to total utility (TU) , marginal utility (MU) , consumer surplus (CS) , and total expenditure (TE) ?

• A)TU increases, MU decreases, CS decreases, and TE decreases
• B)TU increases, MU increases, CS increases, and TE decreases
• C)TU decreases, MU increases, CS decreases, and TE increases
• D)TU decreases, MU decreases, CS decreases, and TE decreases
• E)TU decreases, MU increases, CS decreases, and TE decreases

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Definitions:

Merchandise Inventory Account

An account in the general ledger that tracks the cost of goods intended for sale during an accounting period.

Worksheet

A document or tool used by accountants for preparing financial statements and supporting calculations.

Sales

Sales refer to the total revenue earned by a business from selling goods or services.

Worksheet

A spreadsheet used for preparing financial statements and reconciling accounts.