Figure 21-13 -Refer to Figure 21-13. as the Consumer Moves from a Moves

question 489

Multiple Choice

Figure 21-13
-Refer to Figure 21-13. As the consumer moves from A to B to C, the marginal rate of substitution

• A)increases.
• B)decreases.
• C)remains constant.
• D)first increases, then decreases.

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Definitions:

Luxury

Products or services viewed as luxurious and not necessary, frequently linked with premium quality and a high cost.

Necessity

A good or service that is essential for survival and basic well-being, often implying inelastic demand with respect to price changes.

Price Elastic Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with a higher elasticity indicating a greater response.

Dental Floss

A thin thread used to remove food and dental plaque from between teeth in areas a toothbrush is unable to reach.