The Marginal Rate of Substitution

question 18

Multiple Choice

The marginal rate of substitution:

• A) remains constant as the consumer moves around an indifference curve.
• B) is constant if the goods are perfect complements.
• C) decreases as the consumer moves down a typical indifference curve.
• D) cannot be defined if the goods are perfect substitutes.
• E) none of the above

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Definitions:

Henri Fayol

A French mining engineer and management theorist who developed a general theory of business administration and is famous for establishing the five functions of management.

Unity of Command

A principle in management and military strategy that each employee or soldier should receive orders from and report to only one superior.

Scalar Chain

A concept in management that denotes a clear line of authority in an organization, from the top management to the lowest rank.

Scalar Chain Principle

A concept in organizational management that asserts a clear and unbroken line of authority within the hierarchy of an organization from the top to the bottom.