The Marginal Rate of Substitution

question 17

Multiple Choice

The marginal rate of substitution

• A) can be computed by measuring the slope of the indifference curve.
• B) can be computed by measuring the curvature of the indifference curve.
• C) cannot be deduced from the properties of the indifference curve.
• D) can only be computed if we know the prices of all goods.
• E) can be deduced from the budget line.

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Definitions:

Sales Clerk

An employee who handles the exchange of goods for payment, typically in a retail setting, assisting customers in finding products and completing purchases.

Daily Sales

The total revenue generated from goods or services sold by a company during a single day.

Static Budget

A fixed budget that does not change with actual activity levels, designed for planning purposes.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, providing a more useful tool for performance evaluation.