When Two Goods Are Perfect Substitutes, the Marginal Rate of Substitution

question 24

Multiple Choice

When two goods are perfect substitutes, the marginal rate of substitution:

• A)increases as the abundance of one good increases
• B)increases as the scarcity of one good increases
• C)decreases as the scarcity of one good increases
• D)is constant

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Definitions:

Purchases Journal

A specialized accounting journal used to record all purchases of merchandise, supplies, or other goods on credit.

Correcting Entries

Adjustments made in accounting records to amend errors or omissions.

General Journal

A fundamental accounting document where all kinds of financial transactions are initially recorded before they are transferred to specific accounts in the ledger.

Special Journal

A type of accounting journal designed for recording a specific type of transaction in a more efficient manner.