If the Marginal Utility of a Good Is Constant, What

question 146

Multiple Choice

If the marginal utility of a good is constant, what impact will a decrease in the price have on the consumption of that good?

• A) It will increase the total utility as consumers purchase less of the good.
• B) It will increase the marginal utility per dollar spent, and a consumer will purchase more of the good.
• C) It will decrease the marginal utility per dollar spent, and a consumer will purchase less of the good.
• D) It will decrease the total utility as consumers purchase more of the good.

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specified period, resulting in net profit or loss.

Debit Entries

Accounting entries that increase an asset or expense account, or decrease a liability or equity account.

Credit Entries

Bookkeeping records that increase liabilities or equity or decrease assets on a company's balance sheet.

Liability Account

A financial accounting account that represents obligations to pay debts or amounts owed to others.