At Consumer Equilibrium Between Goods F and C, All of the Following

question 45

Multiple Choice

At consumer equilibrium between goods F and C, all of the following statements is true except one.Which is the exception?

• A)MU_F/MU_C = P_F/P_C
• B)MRS = -P_F/P_C
• C)MRS = the absolute value of the slope of the budget line
• D)utility is maximized subject to the budget constraint
• E)P_F/P_C = TU_F/TU_C

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Definitions:

Labor

The effort that people contribute to the production of goods and services in an economy, typically measured in terms of hours worked.

Production Function

A mathematical equation that describes the maximum amount of output that can be produced from a given set of inputs.

Labor Input

This denotes the amount of work effort, measured in hours or the number of employees, used in the production of goods and services.

Techniques of Production

The various methods and technologies used in the process of producing goods and services.