Refer to the Accompanying Figure

question 24

Multiple Choice

Refer to the accompanying figure. When Jeff goes from watching 3 to 4 movies a day, his total utility:

• A)increases.
• B)decreases.
• C)does not change.
• D)gets close to zero.

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Definitions:

Consumer Surplus

The gap between what consumers are ready and able to expend for a good or service and what they actually spend.

Price Ceiling

A legally imposed limit on the price that can be charged for a good or service, typically set below the equilibrium price.

Excess Demand

A situation where the quantity demanded of a good or service exceeds the quantity supplied at a particular price, often leading to upward pressure on prices.

Consumer Surplus

The disparity between the cumulative amount consumers are willing to pay for a product or service and the amount they actually pay.