Examlex
Explain the 'two prices' of options.
Marginal Rate
A term used to describe the rate at which one variable changes as another variable changes by a single unit, often applied in economic analysis like the marginal tax rate or marginal rate of substitution.
Substitution
The act of replacing one good or service with another due to changes in price or preference.
Price Ratio
The relative price of one good or service in comparison to another, often used in economic analysis and decision-making.
Indifference Curve
A graph that shows combinations of two goods between which a consumer is indifferent, reflecting equal levels of utility for the consumer.
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