Use the Following to Answer Questions

question 118

Multiple Choice

Use the following to answer questions:
Figure: The Optimal Quantity
-(Figure: The Optimal Quantity) Look at the figure The Optimal Quantity. If the cost of lawn mowing decreased for all quantities of lawns mowed, the _____ curve in the figure would shift to the _____ and the total profit would _____.

• A) marginal benefit; right; increase
• B) marginal cost; right; increase
• C) marginal benefit; left; decrease
• D) marginal cost; left; decrease

---

Definitions:

Willing To Pay

Willing to pay is the maximum amount that a consumer is prepared to spend on a good or service.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount they actually pay.

Producer Surplus

The difference between what producers are willing to accept for a product versus what they actually receive in the market.

Marginal Benefit

The increased benefit or value received from the consumption or creation of one more unit of a good or service.