When the Price of a Good Rises,the Ratio of the Marginal

question 68

Multiple Choice

When the price of a good rises,the ratio of the marginal utility of that good divided by its price _______ and as a result,consumers purchase _______ of that good.

• A)rises;more
• B)falls;more
• C)rises;less
• D)falls;less

---

Definitions:

Sensitivity

In finance, sensitivity indicates how much the value of an investment or project changes in response to changes in underlying variables, such as interest rates or market conditions.

Net Present Value

The financial difference calculated by subtracting cash outflows’ present value from cash inflows’ present value during a set period.

Sales Quantity

The total volume or number of units sold of a product or service within a specified time frame.

Accounting Break-even

The point at which a project's revenues equal its costs, considering both cash and non-cash expenses.