The Following Diagram Shows One Indifference Curve Representing the Preferences

question 236

Multiple Choice

The following diagram shows one indifference curve representing the preferences for goods x and y for one consumer.
What is the marginal rate of substitution between points A and B?

• A)1/2
• B)4/3
• C)2

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Definitions:

Convergent Thinking

A cognitive approach involving the bringing together of different ideas to determine the single best solution to a given problem.

Parallel Processing

The ability of the brain to simultaneously process incoming stimuli of differing quality, a fundamental mechanism for understanding complex scenarios.

Serial Processing

A cognitive process in which the brain analyzes information sequentially, one operation at a time.