The Marginal Rate of Substitution Is Equal to the ________

question 315

Multiple Choice

The marginal rate of substitution is equal to the ________.

• A) marginal cost of each good
• B) magnitude of the slope of the indifference curve
• C) inverse of the slope of the budget line
• D) relative price of the two goods

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Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue.

Sales

The activities involved in selling products or services in return for money or other compensation.

Residual Income

The amount of income that an entity has after all personal debts and expenses have been paid, often used in personal finance, or an approach to measure a department's or investment's profitability after charging cost of capital.

Invested Capital

The cumulative sum of funds invested by stockholders and creditors into a firm for long-term purposes.