An Optimizing Consumer Will Select the Consumption Bundle in Which

question 106

Multiple Choice

An optimizing consumer will select the consumption bundle in which the marginal rate of substitution

• A)is equal to the relative price ratio of the goods.
• B)exceeds the marginal utility of each good by the greatest amount.
• C)is less than the slope of the budget constraint.
• D)All of the above are correct.

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Definitions:

Piaget's Ideas

The theories of cognitive development proposed by Jean Piaget, emphasizing how children progress through distinct stages of development.

Transitivity

Principle that says if a relation holds between a first object and a second object, and holds between the second object and a third object, then it holds between the first object and the third object. Piaget argued that an understanding of transitivity is characteristic of concrete operational thought.

Logical

Pertaining to the use of reason and systematic thinking to analyze and form judgments.

Seriation

The concrete operation that involves ordering stimuli along a quantitative dimension (such as length).