Quiz 6.2

Which describes the economic meanings of value and price?

Value is the marginal benefit obtained and price is the dollars that must be paid.

Consumers' total benefit from consuming a good is equal to the

consumer surplus plus the total amount spent on the good.

The marginal benefit of each additional unit of a good consumed

decreases as more is consumed.

The phrase "decreasing marginal benefit" means that

each additional unit of a good you consume gives you less additional benefit than the previous unit.

Which of the following is true regarding a demand curve? i. The demand curve is also the marginal benefit curve. ii. The demand curve shows the dollars' worth of other goods that people are willing to forgo to consume another unit of the good. iii. The demand curve shows the maximum price that people are willing to pay for another unit of a good.

i, ii, and iii

Which of the following statements is correct? i. The demand curve shows the maximum price people are willing to pay for a given quantity of the good. ii. The maximum price a consumer is willing to pay for an additional unit is the marginal benefit of that unit. iii. Value is what a consumer receives and price is what a consumer pays.

i, ii, and iii

The maximum amount of other goods and services that people are willing to give up in order to get one more unit of a good is defined as the good's

marginal benefit.

To an economist, "value" is the same as

marginal benefit.

Consumer surplus exists when a

person buys something with a marginal benefit more than what they paid.

Value and price can be compared by noting that

price is what we must pay and value is what we are willing to pay.