As Output Rises

question 47

Multiple Choice

As output rises,

• A)both marginal revenue product and marginal physical product rise.
• B)both marginal revenue product and marginal physical product fall.
• C)marginal revenue product rises and marginal physical product falls.
• D)marginal revenue product rises and marginal physical product rises.

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Definitions:

Substitution Effect

A shift in consumer preferences resulting from alterations in the comparative costs of different products, causing buyers to switch from one product to another.

Demand Curves

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing to buy at that price.

Marginal Utility Data

Information that measures the additional satisfaction or benefit that is gained from consuming one more unit of a good or service.

Utility Maximization

The process of choosing the most satisfying option from a set of alternatives based on preferences.