If a Consumer's Marginal Rate of Substitution Is Greater Than

question 158

Multiple Choice

If a consumer's marginal rate of substitution is greater than the relative price of the goods,the consumer is

• A) at his or her best affordable point.
• B) perhaps at his or her best affordable point.
• C) not at his or her best affordable point and should move along his or her indifference curve to a higher budget line.
• D) not at his or her best affordable point and should move along his or her budget line to a higher indifference curve.
• E) More information is needed to determine if the consumer is or is not at his or her best affordable point.

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Definitions:

Impersonal

Lacking warmth or personality; not influenced by, showing, or involving personal feelings.

Group Values

Shared beliefs or standards that guide the behaviors and decisions of a collective or group.

Outnumbered

Being in a situation where one group or individual is significantly less in number compared to another group or individuals.

Changing

Refers to the process or act of making or becoming different.