In the Following Graph the Consumer's Income Is $1,200

question 11

Multiple Choice

In the following graph the consumer's income is $1,200.At point B,

• A)the rate at which the consumer is willing to substitute X for Y is greater than it is at point A.
• B)the consumer is willing to give up more Y in order to gain an extra unit of X than at point A.
• C)the consumer will receive more Y for each unit of X exchanged in the market than at point A.
• D)both a and b
• E)all of the above

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Definitions:

Rational Consumer

A consumer who systematically and logically evaluates available options to maximize their satisfaction or utility in decision-making processes.

Marginal Utility

The surplus enjoyment or utility obtained from the consumption of one extra unit of a good or service.

Budget Line

A line that shows the different combinations of two products a consumer can purchase with a specific money income, given the products’ prices.

Marginal Utility

The additional satisfaction or utility a consumer gets from consuming one more unit of a good or service.