Which One of the Following Statements Is True

question 2

Multiple Choice

Which one of the following statements is true?

• A)Since consumers of a good consume this good until the price equals the value of the last unit, they clearly get no benefit from consuming this good.
• B)Consumers choosing between goods X and Y will set MUX = MUY.
• C)The value of a good to a consumer is measured by the price.
• D)Consumer surplus on a unit of a good will never be zero.
• E)If the marginal utility per dollar of good X is less than the marginal utility per dollar of good Y, then the consumer should shift some spending from X to Y.

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Definitions:

Quota

Limit set on the amounts of particular products that can be imported.

Dumping

Selling products abroad at prices below production costs or below typical prices in the home market to capture market share from domestic competitors.

Cost of Production

The total expenses incurred in the production of goods or services, including raw materials, labor, and overheads.

Protective Tariffs

are taxes imposed on imported goods to protect domestic industries from foreign competition by making imported goods more expensive.