A Consumer Is at an Optimum When the Price of One

question 144

Multiple Choice

A consumer is at an optimum when the price of one good she has been consuming decreases. As a result

• A) the value of the marginal utility of the last unit consumed has increased.
• B) the value of the marginal utility of the last unit consumed has decreased.
• C) the price of the other good must decrease too.
• D) the marginal utility of the last dollar spent on this good is now greater than the marginal utility of the last dollar spent on other goods.

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Definitions:

Working Memory

A cognitive system responsible for temporarily holding and processing information, crucial for reasoning and the guidance of decision-making and behavior.

Long-term Memory

A type of memory that stores information over extended periods, possibly for a lifetime.

Recognition Memory

Recognition memory is a type of memory that enables individuals to identify previously encountered items, objects, or individuals, distinguishing what is familiar from what is not.

Depth-of-processing

A concept in cognitive psychology that describes how deeply information is encoded and thus, how well it is remembered.