The Marginal Rate of Substitution

question 39

Multiple Choice

The marginal rate of substitution

• A)is the amount of one good the consumer is willing to give up in exchange for another so as to keep total satisfaction unchanged.
• B)is constant as one moves along a particular indifference curve.
• C)is the amount of one good the consumer is willing to give up in exchange for another so as to keep total expenditure unchanged.
• D)is equal to the price ratio on the budget line.
• E)always has a positive algebraic value.

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Definitions:

Wage Rates

The standard amount of compensation an employee receives from an employer in exchange for performing a specific task or job, usually expressed per hour or year.

Labor Markets

A market in which individuals seek employment and employers seek workers.

Human Capital

Human capital refers to the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.

Average Salaries

The mean income received by employees within a particular job, industry, or geographical area.