Marginal Utility Theory Is About

question 13

Multiple Choice

Marginal utility theory is about

• A)the consumer behaviour that underlies the theory of demand.
• B)proving that demand curves are always downward sloping.
• C)the total satisfaction resulting from the consumption of some good by the consumer.
• D)how producers allocate their scarce resources.
• E)calculating consumer surplus.

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Definitions:

Upward-Sloping

A scenario where higher levels of a certain variable lead to higher levels of another variable, typically seen in supply curves where higher prices lead to higher quantities supplied.

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare, focusing on who ultimately bears the burden of the tax.

Externality Analysis

The study of costs or benefits that affect parties who did not choose to incur that cost or benefit, typically used in the context of environmental and public policy.

Public Interest Theory

A theory suggesting that regulation is supplied in response to the demand of the public for the correction of inefficient or inequitable market practices.