The Following Diagram Shows One Indifference Curve Representing the Preferences

question 174

Multiple Choice

The following diagram shows one indifference curve representing the preferences for goods X and Y for one consumer. What is the marginal rate of substitution between points A and B?

• A)1/2
• B)4/3
• C)2

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Definitions:

Prime Costs

The combined direct costs of raw materials and labor that are directly attributable to the production of a product.

Conversion Costs

The sum of direct labor and overhead costs involved in converting raw materials into finished goods.

Electricity Costs

The expenses incurred for the consumption of electricity, often classified as a variable cost in production or operations.

Product Cost

The total cost incurred to create a product, typically including direct labor, materials, and overhead expenses.