As a Consumer Gives Up Some of Good a to Get

question 249

Multiple Choice

As a consumer gives up some of good A to get more of good B, his or her marginal rate of substitution of good A for good B:

• A)becomes infinite.
• B)goes from negative to positive.
• C)increases.
• D)decreases.

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Definitions:

Depreciating Capital

Assets that lose value over time due to wear and tear or obsolescence.

Normal Rate Of Return

The average or expected return on an investment or project, often considered the minimum acceptable return given the risk involved.

Rental Car Industry

A sector of the transportation industry that offers vehicles for hire on a short term basis, typically ranging from a few hours to several weeks.

Irrigation System

A network of supplies and managements used to provide water to agricultural land to aid in the growing of crops.