An Inverse Relationship Exists When

question 172

Multiple Choice

An inverse relationship exists when:

• A) there is no association between two variables.
• B) one variable increases and there is no change in the other variable.
• C) one variable increases and the other variable increases.
• D) one variable increases and the other variable decreases.

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Definitions:

Marginal Rate

refers to the rate at which one variable changes as another variable changes slightly, commonly used in the context of taxes or interest.

Indifference Schedule

A representation of combinations of two goods between which a consumer is indifferent because they provide the same level of utility.

Substitution

The act of replacing one item with another, often referring to the economic principle where consumers switch between similar goods in response to changes in price or income.

Indifference Curve

A graph representing combinations of two goods between which a consumer is indifferent, showing preferences and trade-offs.