The want-satisfying power of a good or service is known as
A) purchasing power.
B) utility.
C) consumer optimum.
D) principle of substitution.

Question

Quizplus · Accepted Answer

The want-satisfying power of a good or service is known as utility. It is the ability of a good or service to satisfy a want or need of the consumer. Purchasing power refers to the amount of money that a consumer has available to spend on goods and services. Consumer optimum is the level of consumption that maximizes the satisfaction of the consumer with the available resources. The principle of substitution states that consumers will substitute a cheaper good for a more expensive one if the marginal utility of the cheaper good is the same as the more expensive one.

The Want-Satisfying Power of a Good or Service Is Known