For an Individual Consumer, a Corner Solution May Be Optimal

question 95

Multiple Choice

For an individual consumer, a corner solution may be optimal such that MRS and MRT are not equal,

• A) but this is not possible in an Edgeworth Box due to the transitivity of preferences.
• B) but this is not possible in an Edgeworth Box because price ratios must be positive.
• C) and this may also occur in an Edgeworth Box.
• D) and this may only occur in an Edgeworth Box under the perfect complements case.