If the Marginal Rate of Substitution of X for Y

question 73

Multiple Choice

If the marginal rate of substitution of X for Y is 2,the price of X is $3,and the price of Y is $1,a utility-maximizing consumer should

• A)be indifferent between 1X and 2Y.
• B)prefer 3Y to 1X.
• C)choose less X and more Y.
• D)choose more X and less Y.

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Definitions:

Firm X

A placeholder name commonly used in economic and business contexts to refer to a hypothetical or unidentified company.

Game Theory Matrix

A table or grid representing the possible outcomes of different strategies played by participants in a situation where their decisions affect each other.

Nash Equilibrium

A concept in game theory where each player's strategy is optimal, given the strategies of other players.

Ajax's Profits

The earnings acquired by Ajax, a fictional or specific enterprise, after deducting all costs associated with its operations.