At the Optimal Consumption Bundle, the Marginal Rate of Substitution

question 47

Multiple Choice

At the optimal consumption bundle, the marginal rate of substitution of leisure for consumption is equal to

• A) the real wage and the budget line is tangent to an indifference curve.
• B) minus the real wage and the budget line is tangent to the indifference curve.
• C) the real wage and the budget line intersects the indifference curve.
• D) minus the real wage and the budget line intersects the indifference curve.
• E) the real wage and on the highest possible indifference curve.

---

Definitions:

Specification Limits

The defined range of acceptable values for a product’s dimensions, performance, or other measurable quality.

Standard Errors

A measure of the precision of a sample mean estimate of a population mean.

Pooled Standard Deviation

The combined standard deviation of two or more groups of data, used when the groups have a common or similar mean but differ in sample size.

Sample Means

The average value calculated from a sample of a population.