All of the Following Statements About Marginal Benefit Are Correct

question 174

Multiple Choice

All of the following statements about marginal benefit are correct EXCEPT the marginal benefit of a good

• A) is the benefit a person receives from consuming one more unit of the good or service.
• B) is measured as the maximum amount that a person is willing to pay for one more unit of the good.
• C) is equal to zero when resource use is efficient.
• D) decreases as the quantity consumed of the good increases.

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Definitions:

Aversion

A strong dislike or disinclination towards something.

SML

Stands for Security Market Line, which represents the expected return of investments as a function of their risk, as measured by beta.

Equity

The value of an ownership interest in property, including shareholders' equity in a corporation, representing assets minus liabilities.

Debt

An amount of money borrowed by one party from another, often used to make large purchases that they could not afford under normal circumstances.