Total Surplus Increases with Practice of Price Discrimination Only If

question 38

Multiple Choice

Total surplus increases with practice of price discrimination only if:

• A) consumer surplus increases.
• B) producer surplus increases.
• C) price increases.
• D) output increases.

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Definitions:

Marginal Propensity

The ratio of change in an economic variable (such as consumption or saving) in response to a change in another (such as income), indicating the responsiveness of the variable.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, often used to measure inflation.

Aggregate Expenditure Line

A graphical representation that shows the total planned expenditure at various levels of national income.

Simple Spending Multiplier

The ratio of a change in output to a change in autonomous spending that initiated the change, representing how spending circulates through an economy.