A Consumer Chooses an Optimal Consumption Point Where the

question 177

Multiple Choice

A consumer chooses an optimal consumption point where the

• A)marginal rate of substitution is maximized.
• B)slope of the indifference curve exceeds the slope of the budget constraint by the greatest amount.
• C)ratio of the marginal utilities equals the ratio of the prices.
• D)All of the above are correct.

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Definitions:

Efficiently

Pertains to performing or operating in the best possible manner with the least waste of time and effort.

Resources

Various means or inputs (such as labor, capital, land) used in the production of goods and services.

Efficiency

The extent to which resources are used in the most productive way possible to achieve maximum output or outcomes.

Opportunity Costs

The cost of an alternative that must be forgone in order to pursue a certain action or the benefits you miss out on when choosing one alternative over another.