Which One of the Following Statements Is True

question 2

Multiple Choice

Which one of the following statements is true?

• A)Since consumers of a good consume this good until the price equals the value of the last unit, they clearly get no benefit from consuming this good.
• B)Consumers choosing between goods X and Y will set MUX = MUY.
• C)The value of a good to a consumer is measured by the price.
• D)Consumer surplus on a unit of a good will never be zero.
• E)If the marginal utility per dollar of good X is less than the marginal utility per dollar of good Y, then the consumer should shift some spending from X to Y.

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Definitions:

Price Elasticity

An index indicating how the amount of a product demanded or supplied changes in response to a price variation.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a particular period of time.

Price

The amount of money expected, required, or given in payment for something, often determined by the conditions of demand and supply.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, indicating the sensitivity of consumers to price changes.