Choose the Statement or Statements That Are Correct

question 89

Multiple Choice

Choose the statement or statements that are correct. I.The value of one more unit of a good or service is its marginal benefit.
II.Marginal benefit equals the total amount we spend on a good or service.
III.Marginal benefit is the maximum amount willingly paid for another unit of a good or service.

• A)I only
• B)II only
• C)I and III
• D)III only
• E)I,II,and III

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Definitions:

Complementary Good

A complementary good is a product or service that adds value to another product or service when both are used together, leading to an increase in demand for one when the price of the other decreases.

Inferior Good

An inferior good is one where demand decreases as the income of the consumer increases, opposed to a normal good where demand increases with an increase in income.

Price Elasticity

A determination of how price fluctuations affect the demand level for a good.

Demand Coefficient

A numerical measure of the sensitivity of demand for a good or service to a change in one of its determinants, such as price, income, or the price of related goods.