A Decrease in Consumption Will Result in

question 39

Multiple Choice

A decrease in consumption will result in

• A) both total utility and marginal utility decreasing.
• B) total utility increasing, but marginal utility decreasing.
• C) total utility decreasing, but marginal utility increasing.
• D) both total utility and marginal utility increasing.

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Definitions:

Marginal Benefit

The incremental gain in happiness or usefulness obtained through consuming an extra unit of a good or service.

Marginal Cost

Marginal cost is the cost incurred by producing one additional unit of a product or service, emphasizing the concept of variable costing.

Resource Allocation

The process of allocating resources, including capital, labor, and materials, among competing uses or projects in an efficient manner.

Production Possibilities Curve

The Production Possibilities Curve (PPC) is a model that shows the various combinations of two goods or services that an economy can produce, given its resources and technology, illustrating the concept of opportunity cost.