Suppose at the Consumer's Current Consumption Bundle the Marginal Rate

question 97

Multiple Choice

Suppose at the consumer's current consumption bundle the marginal rate of substitution of cheese for wine is 1/2 bottle of wine per pound of cheese. The price of one pound of cheese is $6, and the price of a bottle of wine is $10. The consumer should increase his consumption of

• A)cheese, decrease his consumption of wine, and move to a lower indifference curve.
• B)cheese, decrease his consumption of wine, and move to a higher indifference curve.
• C)wine, decrease consumption of cheese, and move to a higher indifference curve.
• D)cheese, decrease consumption of wine, and remain on the same indifference curve.

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Definitions:

Competitive

Pertaining to a state or condition where businesses or individuals vie for the same customers or market share, often by offering superior values, quality, or innovation.

Product Advertisements

Marketing messages specifically designed to inform, persuade, or remind consumers about a particular product or brand.

Competitive

Having the quality or attributes necessary to challenge other entities in the same field or market.

Persuasive

An adjective describing something designed to convince or influence someone to adopt a certain belief or to take action.