Use the Following to Answer Questions

question 131

Multiple Choice

Use the following to answer questions .
Exhibit: Consumption and Real GDP
-(Exhibit: Consumption and Real GDP) If real GDP were $12 trillion, consumption equals

• A) 5 trillion.
• B) 7 trillion.
• C) 9 trillion.
• D) 11 trillion.

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Definitions:

Marginal Cost

The financial outlay required to produce a further unit of a product or service.

Demand

Demand refers to the quantity of a product or service that consumers are willing and able to purchase at various prices during a given time period.

Inverse Demand Curve

A representation of the demand for a good showing the maximum price consumers are willing to pay for a given quantity.

Perfect Price Discrimination

Perfect price discrimination occurs when a seller charges each buyer their maximum willingness to pay, extracting all consumer surplus.