The Marginal Rate of Substitution

question 41

Multiple Choice

The marginal rate of substitution

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

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Definitions:

Law Merchant

A body of commercial law that merchants developed over centuries, based on common practices and used to resolve disputes.

Magna Carta

A charter of liberties to which the English barons forced King John to give his assent in 1215; a document constituting a fundamental guarantee of rights and privileges.

Safe Passage

The right or permission to traverse a specific area or domain without harm or obstruction.

Breach of Contract

A violation of any of the agreed-upon terms and conditions of a binding contract, which may result in legal action or damages.