Use the Following Statements to Answer This Question: I

question 89

Multiple Choice

Use the following statements to answer this question: I. The equal marginal principle may be used to characterize the maximum utility consumption decision even if the diminishing MRS assumption does not hold.
II) The equal marginal principle implies that the MRS at the optimal consumption bundle is always equal to the price ratio.

• A) I and II are true.
• B) I is true and II is false.
• C) II is true and I is false.
• D) I and II are false.

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