You View Tea and Scones as Perfect Complements, and You

question 12

Multiple Choice

You view tea and scones as perfect complements, and you prefer to consumer one cup of tea with one scone. Also, your indifference curves are plotted with tea on the vertical axis. If you presently have two cups of tea and one scone, what this the marginal rate of substitution (MRS) at this point?

• A) +1
• B) -1
• C) Zero
• D) Infinity

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Definitions:

Possession

The physical holding or control of an object or property, which may or may not be accompanied by legal ownership.

Debt

An amount of money borrowed by one party from another, typically with the obligation to pay back with interest.

Unilateral Discharge

When one party ends an agreement or contract without the need for permission from or negotiation with the other party.

Discharged

Released from an obligation, duty, or debt; in employment, it can also mean being fired or let go from a job.