The Value of the Marginal Product Is

question 74

Multiple Choice

The value of the marginal product is

• A)total revenue minus total cost.
• B)the change in total output divided by the change in an input.
• C)the marginal product of an input times the price of the output.
• D)total output divided by total inputs.

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Definitions:

Compensating Variation

An economic concept referring to the amount of money one would need to attain the same level of utility after a price change.

Equivalent Variation

A measure in economics that calculates the change in wealth needed to reach utility before a price change, preserving consumer satisfaction levels.

Utility Function

An equation that quantifies how different combinations of goods or services provide different levels of happiness or satisfaction to an individual.

Consumer's Surplus

The disparity between what consumers are prepared and capable of spending for a product or service and the actual amount they end up paying.