Personal Consumption Expenditures

question 150

Multiple Choice

Personal consumption expenditures:

• A) represent close to two-thirds of GDP.
• B) are equal to personal income minus individual taxes.
• C) include durable good purchases but not nondurable good purchases.
• D) do not include any intangible consumption items.
• E) include all goods and services bought by the government.

---

Definitions:

Profit Maximizing Price

The price level at which a business can achieve the highest profit possible, based on its production costs and demand for its products.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded.

Profit

Difference between total revenue and total cost.

Marginal Revenue

The additional income earned from the sale of one more unit of a product or service.