The Marginal Rate of Substitution Is Equal to the

question 483

Multiple Choice

The marginal rate of substitution is equal to the

• A)slope of the indifference curve.
• B)ratio of the prices of the two goods.
• C)slope of the budget constraint.
• D)All of the above are correct.

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Definitions:

Total Utility

The total satisfaction or benefit received by consuming a given total amount of a good or service.

Money Income

The total amount of monetary earnings or revenue received by an individual or entity, usually measured within a specific period.

Slope

The measure of the steepness or incline of a line, indicating the rate at which y values change with respect to x values.

Budget Line

A chart that displays every possible mix of two commodities that could be bought, given a particular financial plan, with unchanging prices.