When the Price of a Commodity Rises, We Can Expect

question 124

Multiple Choice

When the price of a commodity rises, we can expect

• A)marginal utility of the last unit purchased will rise.
• B)marginal utility of the last unit purchased will fall.
• C)marginal utility of the last unit purchased will be unaffected.
• D)purchases to rise because of the increased marginal utility.

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Definitions:

Total Product

The aggregate quantity of output produced by an economic unit from a given set of inputs during a specific period of time.

Variable Cost

Costs that change in direct proportion to changes in a firm’s level of production.

Labor

Labor refers to the human effort, both physical and mental, used in the production of goods and services.