In an Indifference Curve/budget Line Diagram, a Consumer Will Select

question 357

Multiple Choice

In an indifference curve/budget line diagram, a consumer will select the combination of goods that is on the budget line and for which the

• A) marginal rate of substitution between two goods is equal to the relative price of the two goods.
• B) marginal rate of substitution between two goods is greater than the relative price of the two goods.
• C) slope of the indifference curve is less than the relative price of the two goods.
• D) slope of the indifference curve is greater than the relative price of the two goods.

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Definitions:

Income Before Interest

The earnings generated by a business before interest expenses are subtracted, indicating operational profitability.