On a Graph That Shows the Derivation of the AD

question 11

Multiple Choice

On a graph that shows the derivation of the AD curve, an exogenous change in the price level causes

• A)a movement along the AE curve and a shift in the AD curve.
• B)a shift in both the AE and AD curves.
• C)a movement along the AE curve but not along the AD curve.
• D)a shift in the AE curve and a movement along the AD curve.
• E)a movement along both the AE and AD curves.

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Definitions:

Marginal Utility

The supplementary enjoyment or advantage gained by consuming one more unit of a good or service.

Consumer Surplus

The differentiation between the total investment consumers are willing and able to make in a product or service and the investment they end up making.

Marginal Utility

The supplementary joy or advantage an individual experiences when acquiring an extra unit of a good or service.

Total Utility

The total satisfaction or benefit that a consumer derives from consuming a certain quantity of a good or service.