Which of the Following Is Most Likely to Be an Example

question 93

Multiple Choice

Which of the following is most likely to be an example of the law of demand in action?

• A)A decrease in the price of milk has no effect on the amount of milk consumed.
• B)The amount of candy sold increases while the price of candy remains constant.
• C)An increase in the price of eggs is followed by an increase in the sales of eggs.
• D)An increase in the price of gasoline is followed by a reduction in gasoline sales.

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Definitions:

Maximum Utility

The highest level of satisfaction or benefit that a consumer can obtain from the consumption of goods and services within the constraints of their income and prices.

Consumer Income

The total amount of money earned by individuals or households that can be used for saving, spending, or investing.

MU y/ Pᵧ

MU y/ Pᵧ represents the marginal utility of good "y" divided by its price, a concept in economics used to analyze consumer choice, indicating the additional satisfaction per unit of currency spent on that good.

Maximize Utility

The economic principle of selecting the option that yields the highest satisfaction or benefit.