Which of the Following Equations Is Correct

question 131

Multiple Choice

Which of the following equations is correct?

• A) MC = MSC + marginal external cost
• B) MSC = MC ÷ marginal external cost
• C) MSC = MC + marginal external cost
• D) MSC = MC × marginal external cost
• E) MC = marginal external cost - MSC

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Definitions:

Indifference Curves

Graphs representing different bundles of goods between which a consumer is indifferent, showing the combinations of goods that provide the same level of utility to the consumer.

Marginal Utility

The additional satisfaction or utility a consumer gains from consuming one more unit of a good or service.

Competitive Equilibrium Price Ratio

The ratio of prices that ensures the equality of supply and demand in a competitive market, often used to observe relative price changes between commodities.

Utility Function

A mathematical representation expressing an individual's preference ordering over a set of goods or services, used in economics to model decision making under uncertainty.