Use the Following to Answer Question(s): Markets and Efficiency

question 18

Multiple Choice

Use the following to answer question(s) : Markets and Efficiency

-(Exhibit: Markets and Efficiency) A producer will produce additional apples:

• A) as long as marginal benefit is less than marginal cost.
• B) as long as marginal benefit exceeds marginal cost.
• C) if marginal cost is decreasing and price is the same.
• D) if price does not cover costs.

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Definitions:

Consumption

Families engaging in the use of products and services.

Income

Sums of money attained, usually on a fixed schedule, from work or investment undertakings.

Interest Rate

The proportion at which principal loaned money is repaid with interest to the lender over time, usually as an annual rate.

Utility Function

A mathematical representation that ranks individuals' or entities' preferences over a set of goods or outcomes.