Consumers Are Willing to Purchase a Product Up to the Point

question 169

Multiple Choice

Consumers are willing to purchase a product up to the point where

• A)the marginal benefit of consuming the product is equal to the marginal cost of consuming it.
• B)the consumer surplus is equal to the producer surplus.
• C)the marginal benefit of consuming the product equals the area below the supply curve and above the market price.
• D)the marginal benefit of consuming a product is equal to its price.

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Definitions:

Saving

The portion of income not spent on consumption or taxes, typically put aside for future use or investment.

Potential GDP

Potential GDP refers to the maximum output an economy can produce without triggering inflation, if all resources are fully employed.

Full-employment GDP

Full-employment GDP is the maximum potential output an economy can produce when all resources, including labor, are fully utilized without causing inflation.

Capitalist Economy

A financial system where capital goods are owned by individuals or corporations, with investment choices, prices, production, and goods distribution primarily influenced by competition within a free market.