If Marginal Utility Is Zero

question 8

Multiple Choice

If marginal utility is zero,

• A) a rational consumer will consume one more unit.
• B) a rational consumer will consume one less unit next time.
• C) a rational consumer will not consume additional units beyond this point.
• D) a rational consumer will consume one more unit if the price is zero.

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Definitions:

Profit

The financial gain that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Borrow

To receive something, especially money, from a person or financial institution with the agreement to return it, typically with interest, at a future date.

Gross Domestic Product (GDP)

The nation’s expenditure on all the goods and services produced in the country during the year at market prices; represented by GDP.

Economics

The social science that studies the production, distribution, and consumption of goods and services, and how individuals, businesses, and governments make choices about allocating resources.