If Total Utility Is Increasing as More of a Good

question 43

Multiple Choice

If total utility is increasing as more of a good is consumed:

• A) marginal utility must be decreasing.
• B) marginal utility must be increasing at an increasing rate.
• C) marginal utility is positive.
• D) both (b) and (c) are true.

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Definitions:

Subsidy Payments

Financial support given by a government or organization to lower the price of a product or service or to support a business or economic sector.

Quantity Supplied

Quantity supplied refers to the total amount of a product or service that producers are willing and able to sell at a given price over a specified period.

Per Unit Tax

A tax levied on goods that is fixed in amount for each unit produced or sold.

Consumer Surplus

The gap in the total funds consumers are willing and financially prepared to allocate for a good or service, versus the funds actually allocated.