When the Consumer Has Chosen His or Her Optimal Values

question 8

Multiple Choice

When the consumer has chosen his or her optimal values of first-period and second-period consumption, the marginal rate of substitution equals:

• A)1 plus the interest rate r.
• B)1 minus the interest rate r.
• C)1 divided by the interest rate
• D)r. the interest rate r.

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Definitions:

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Economic disturbances or shifts that result in significant changes to employment, prices, or resource allocation.

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The degree to which a good or service is financially accessible to consumers, often considering income levels and prices.