Assume an Individual with a Downward-Sloping Demand Curve Is Paying

question 66

Multiple Choice

Assume an individual with a downward-sloping demand curve is paying a single price for each unit of some commodity.He will experience consumer surplus on

• A)all units that were not bought at that particular price.
• B)all of the units bought.
• C)all units bought with the possible exception of the last unit.
• D)the first unit only.
• E)none of the units.

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Definitions:

Law of Diminishing Returns

The principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.

Marginal Product

The additional output that can be produced by adding one more unit of a specific input, while holding all other inputs constant, crucial in understanding production efficiency.

Average Product

The output per unit of input, such as the average amount of goods produced per labor hour.

Total Product

The total output of goods or services produced by a firm in a given period of time.