The Following Diagram Shows One Indifference Curve Representing the Preferences

question 154

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)2/5
• B)1
• C)5/2

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Definitions:

Materials Cost

The expense incurred for materials that are used in the production of goods or services.

Direct Labor Costs

Direct labor costs are the wages paid to employees who are directly involved in the production of goods or services.

Conversion Costs

Conversion costs are expenses incurred during the process of converting raw materials into finished products, including both direct labor and manufacturing overhead.

Manufacturing Process

A sequence of operations involving the conversion of raw materials into finished goods.