A Consumer Maximizes Satisfaction at the Point Where His Subjective

question 49

Multiple Choice

A consumer maximizes satisfaction at the point where his subjective valuation of good X measured as the amount of good Y he or she is willing to give up to obtain an additional unit of X
Equals

• A)one over the slope of the indifference curve through that point.
• B) Py / Px.
• C) Px/Py.
• D) Y/Px.
• E)the slope of the indifference curve through that point.

---

Definitions:

Elasticity

Elasticity measures how responsive the quantity demanded or supplied of a good or service is to a change in one of its determinants, such as price, income, or prices of related goods.

Constant-Cost Industry

An industry where the input prices remain stable as the industry's output changes, leading to a linear supply curve because costs do not vary with the level of production.

Short Run

A period of time during which at least one input of production is fixed, limiting the ability of a firm to adjust its output levels fully.