What Is the Basic Consumption Unit for Most Consumer Goods

question 31

Multiple Choice

What is the basic consumption unit for most consumer goods?

• A) organization
• B) household
• C) individual
• D) husband
• E) wife

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Definitions:

Substitution Effect

That part of an increase (decrease) in amount consumed that is the result of a good being cheaper (more expensive) in relation to other goods because of a reduction (increase) in price.

Income Effect

The change in consumption resulting from a change in real income, typically due to a price change of goods or services.

Marginal Satisfaction

The change in satisfaction or utility that a consumer experiences from consuming an additional unit of a good or service.

Utility-Maximizing

The economic principle that consumers choose combinations of goods and services to maximize their satisfaction or utility under budget constraints.