An Optimizing Consumer Will Select the Consumption Bundle in Which

question 139

Multiple Choice

An optimizing consumer will select the consumption bundle in which the

• A)ratio of total utilities is equal to the relative price ratio.
• B)ratio of income to price equals the marginal rate of substitution.
• C)marginal rate of substitution is equal to the relative price ratio of the goods.
• D)marginal rate of substitution is equal to marginal utility.

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Definitions:

Equivalent Interest Rate

A rate that converts interest rates of various compounding periods into an annual rate for comparison purposes.

Nearest 0.01%

Rounding a percentage to the closest one-hundredth of a percent.

Nearest 0.01%

Rounding a number or percentage to the closest hundredth of a percent for precision.

Emotions

Complex psychological states involving physiological arousal, feelings, cognitive processes, and behavioral reactions.