If the Price Consumption Curve of Good X, Which Is

question 24

Multiple Choice

If the price consumption curve of good X, which is on the horizontal axis, slopes downward, we can be sure that consumers spend

• A)less money on X even though they buy more of it.
• B)the same proportion of their budget on X.
• C)more money on X but they get more of X.
• D)more money on X but they get less of X.

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Definitions:

Long-run Average Total Cost

This refers to the per unit cost of production when all inputs can be adjusted, conceived for analyzing the scale of production without the constraint of fixed capital.

Per Unit Costs

The average cost for each unit produced, calculated by dividing the total costs of production by the number of units produced.

Inefficient Use

The allocation or utilization of resources in a manner that does not maximize their potential or economic value.

Resource Prices

The costs associated with acquiring the inputs or factors of production needed to produce goods or services, such as labor, raw materials, and capital.