The Consumer Will Select That Point on the Budget Line

question 267

True/False

The consumer will select that point on the budget line which puts him or her on the highest attainable indifference curve.

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Definitions:

Constant Rate

A consistent, unchanging speed or pace at which something occurs or changes over time.

Diminishing Marginal Returns

The principle that adding an additional factor of production results in a smaller increase in output after a certain point.

Total Product

The total output or production by a firm using a given amount of inputs within a specific period.

Variable Input

A resource or factor of production whose quantity can be changed easily in the short term to adjust production levels.