Ying and Fei's Marginal Rate of Substitution of Purses for Shoes

question 80

Multiple Choice

Ying and Fei's marginal rate of substitution of purses for shoes is 2.5. Assuming the allocation of purses and shoes is Pareto efficient, the price ratio of purses to shoes is ____.

• A) 2.5
• B) 4
• C) 2
• D) 5

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Definitions:

Reactance

A stimulating reaction triggered by suggestions, people, norms, or mandates that endanger or abolish particular liberties of action.

Forbidden Option

An alternative in decision-making that is socially, morally, or legally deemed unacceptable or off-limits.

Aggressively

In a manner that is forceful, assertive, or intended to dominate or control.

Social Environment

The surrounding physical and social environment where people dwell or where specific happenings or growth takes place.