At the Point Where the Budget Line Is Just Touching

question 221

Multiple Choice

At the point where the budget line is just touching an indifference curve at one point,

• A) the slope of the budget line is equal to the slope of the indifference curve.
• B) the marginal rate of substitution equals the relative price.
• C) the consumer can change his or her consumption and can move to a higher indifference curve.
• D) Both answers A and B are correct.
• E) Both answers B and C are correct.

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Definitions:

Pressure Bleeder

A device used in hydraulic systems to remove air bubbles by applying pressure to the fluid, ensuring proper operation and performance.

Maximum Air System Pressure

The highest pressure that an air system can safely operate at, typically measured in pounds per square inch (psi) or bar.

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A condition where a brake rotor is not perfectly aligned on its axis, causing uneven brake pad wear and potential vibration during braking.

Dial Indicator

An accurate linear measuring tool actuated by a plunger with a rotary display. Used to measure endplay, runout, recess depth, and so on.