When There Is a Change in Purchasing Power as a Result

question 67

Multiple Choice

When there is a change in purchasing power as a result of a change in the price of a good,economists call it

• A) the real-income effect.
• B) the substitution effect.
• C) marginal utility.
• D) diminishing marginal utility.
• E) the consumer optimum.

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Definitions:

Marginal Revenue Product Schedule

A chart that shows the additional revenue generated from employing one more unit of a resource.

Marginal Physical Product

The additional output resulting from the use of one more unit of a variable input, keeping all other inputs constant.

Crude Oil

Unprocessed petroleum, a natural fossil fuel consisting primarily of hydrocarbons.

Production of Gasoline

The industrial process of converting crude oil into gasoline, a primary fuel for vehicles, through various refining techniques.