A Consumer Has the Indifference Map Shown Below

question 91

Multiple Choice

A consumer has the indifference map shown below.The market prices of X and Y are $20 and $12,respectively.The consumer has $1,000 to spend on goods X and Y.For the utility-maximizing bundle,the marginal rate of substitution is ____________________ the slope of the budget line (in absolute value) ,and the ratio MU/P for good X is ____________ the ratio MU/P for good Y.

• A)greater than; greater than
• B)greater than; less than
• C)less than; greater than
• D)less than; less than
• E)equal to; equal to

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Definitions:

Inputs

Resources used in the production process, including labor, capital, materials, and other goods and services.

Production Function

A model in economics that describes the relationship between the quantities of productive factors used (inputs) and the amount of product obtained (outputs).

Inputs

Resources used in the production of goods and services, such as labor, materials, and capital.

Output

The total amount of goods or services produced by a company, system, or economic process.