Multiple Choice
As people make more money, their spending behavior changes. This is known as:
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5. Consumer and Producer Surplus; Price Ceilings and Floors
Consumer Surplus and Willingness to Pay
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Consumption includes purchases made by _________.
A
foreign countries
B
the government
C
firms
D
households
Verified step by step guidance1
Understand the concept of consumption in microeconomics: Consumption refers to the total spending by households on goods and services for personal use.
Identify the main economic agents involved in spending: households, firms, government, and foreign countries.
Recall that firms primarily invest or produce goods, governments spend on public services and infrastructure, and foreign countries engage in trade.
Recognize that consumption specifically includes purchases made by households, as they buy goods and services for their own use.
Conclude that the correct answer is households, since consumption measures household spending in the economy.
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