The Marginal Rate of Substitution Measures the

question 252

Multiple Choice

The marginal rate of substitution measures the

• A)magnitude of the substitution effect.
• B)total utility received by a consumer when equilibrium is achieved.
• C)extra utility that a consumer derives from successive units of a product.
• D)consumer's willingness to substitute one product for another so that total utility will remain constant.

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Definitions:

Thoughts

Mental processes that involve the organization and processing of information, including beliefs, opinions, and plans.

Basic Approach

The fundamental strategy or method adopted in dealing with a problem or in understanding a concept.

Paradigm

A distinct set of concepts or thought patterns, including theories, research methods, postulates, and standards for what constitutes legitimate contributions to a field.

Limit Inquiry

A process of setting boundaries around the scope of an investigation to focus on specific variables or contexts.