If the Marginal Benefit of Consuming Another Unit of a Good

question 111

Multiple Choice

If the marginal benefit of consuming another unit of a good is positive, then to reach the allocatively efficient level of output more of the good should be produced and consumed

• A) no matter what.
• B) as long as the consumer can afford to pay for it.
• C) if the total benefit of the good is greater than its total cost.
• D) if the marginal benefit of the good is greater than its marginal cost.

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Definitions:

Music Downloads

Digital files of music tracks that can be legally or illegally downloaded from the internet to a computer or mobile device.

Sugar Quotas

Government-imposed limits on the amount of sugar that can be imported or produced, often to stabilize domestic prices.

Consumer Surplus

The disparity between what consumers are prepared to pay for a product or service and the actual amount they end up paying.

Consumer Surplus

The gap between the total price consumers are ready to pay for a good or service and what they actually spend on it.