Which One of the Following Statements Is True About the Indifference

question 111

Multiple Choice

Which one of the following statements is true about the indifference curves for two goods that are perfect substitutes?

• A)The indifference curves are negatively-sloped straight lines.
• B)The indifference curves are L-shaped.
• C)The marginal rate of substitution is zero.
• D)The indifference curves are positively-sloped straight lines.
• E)The marginal rate of substitution is infinity.

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Definitions:

Disinflation

A reduction in the rate of inflation, indicating a slowdown in the rate at which prices increase.

CPI

Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, used to assess inflation.

Base Year

A reference year against which economic growth or inflation is measured, often using indices in real GDP calculations or price levels.

Structural Unemployment

A form of unemployment caused by a mismatch between the skills that workers offer and the skills demanded by employers, often due to technological changes or shifts in the economy.