Use the Figure Below to Answer the Following Question

question 3

Multiple Choice

Use the figure below to answer the following question. Figure 9.2.4
-Refer to Figure 9.2.4.Rashid buys only books and CDs.The figure shows his preferences.Rashid's indifference curves ________ display diminishing marginal rate of substitution because ________.

• A)do;Rashid is indifferent between consuming 6 CDs and 2 books and consuming 2 CDs and 3 books
• B)do not;the magnitude of the slope of both indifference curves decreases as Rashid consumes more CDs and fewer books
• C)do not;Rashid is indifferent between consuming 6 CDs and 2 books and consuming 2 CDs and 3 books
• D)do;the magnitude of the slope of both indifference curves decreases as Rashid consumes more CDs and fewer books
• E)do;the price of a CD decreases as Rashid increases the quantity he buys

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Definitions:

Par Value

The face value of a bond or stock as stated by the issuing company, which often bears no relation to its market value.

Fair Value

An estimate of the price at which an asset or liability could be bought or sold in an orderly transaction between market participants at the measurement date.

Par Value

The face value of a bond or the stock value stated in the corporate charter, not necessarily related to its market value.

Fair Value

The estimated price at which an asset or liability could be traded in a fair transaction between willing parties.