What Does the Marginal Rate of Substitution Measure

question 196

Multiple Choice

What does the marginal rate of substitution measure?

• A)It measures the rate at which a consumer must give up one good to purchase another good.
• B)It measures the rate at which a consumer will substitute one good for another when the price of one good changes.
• C)It measures the change in utility from consuming one additional unit of a good.
• D)It measures the rate at which a consumer is willing to trade off one product for another while keeping utility constant.

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Definitions:

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The act of recommending someone for a job or professional service, often based on personal endorsement.

Expenses

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Compensation Strategy

An approach used by businesses to design and implement payment systems and benefits to employees.