Alvin's Preferences for Good X and Good Y Are Shown

question 35

Multiple Choice

Alvin's preferences for good X and good Y are shown in the diagram below. Figure 3.1
-Refer to Figure 3.1. Which of the following is true concerning Alvin's marginal rate of substitution?

• A) It is diminishing.
• B) It is positive but varies along the indifference curve.
• C) It is constant.
• D) It is zero.

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Definitions:

Impossibility of Performance

A legal defense used in contract law where a party claims that fulfilling the obligations of a contract has become objectively impossible due to unforeseen events.

Supervening Events

Events that occur after the formation of a contract which could render the performance impossible or significantly change the nature of the original agreement.

F.O.B. Buffalo

An Incoterm meaning Free On Board Buffalo, indicating that the seller delivers when the goods are loaded on board a vessel at the Buffalo location, with the seller covering transportation to that point but the buyer taking responsibility thereafter.

Tender

An offer of payment or delivery of goods in fulfillment of an obligation or contract.