Cher's Marginal Rate of Substitution of Necklaces (N) for Earrings

question 20

Multiple Choice

Cher's marginal rate of substitution of necklaces (N) for earrings (E) is 5 (MRS_EN = 5) . This information implies that:

• A) Cher is willing to trade away five necklaces for one more pair of earrings, holding her utility constant.
• B) Cher will move to a higher indifference curve if she trades away five necklaces for one more pair of earrings.
• C) Cher should own five times as many necklaces as pairs of earrings.
• D) the slope of the indifference curve is 5 and thus upward sloping.

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