Bundle L Contains 10 Units of Good X and 20

question 404

Multiple Choice

Bundle L contains 10 units of good X and 20 units of good Y. Bundle M contains 8 units of good X and 21 units of good Y. The consumer is indifferent between bundle L and bundle M. Assume that the consumer's preferences satisfy the four properties of indifference curves. Which of the following correctly expresses the marginal rate of substitution of good X for good Y between these two points?

• A)The consumer will give up 1 unit of good X to gain 2 units of good Y.
• B)The consumer will give up 2 units of good X to gain 1 unit of good Y.
• C)The price of good X is twice as large as the price of good Y.
• D)The price of good X is half as large as the price of good Y.

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