As You Consume More and More of a Service

question 5

Multiple Choice

As you consume more and more of a service,

• A)your consumer surplus is increasing.
• B)your consumer surplus is remaining constant.
• C)your consumer surplus is decreasing.

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Definitions:

CPI (Consumer Price Index)

A measurement that examines the weighted average of prices of a basket of consumer goods and services, usually used to estimate inflation.

Real Value

The value of an object, service, or currency adjusted for inflation, representing its true purchasing power.

Nominal Price

The price of a good or service in current monetary terms, without adjusting for inflation or deflation.

Microeconomic Analysis

The study of economic behavior of individuals, households and firms, focusing on the patterns of supply and demand and the price formation in markets.