Which Property Characterizes the Consumption Bundle Selected by an Optimizing

question 124

Multiple Choice

Which property characterizes the consumption bundle selected by an optimizing consumer

• A)The ratio of total utilities is equal to the relative price.
• B)The ratio of income to price equals the marginal rate of substitution.
• C)The marginal rate of substitution is equal to the relative price.
• D)The marginal rate of substitution is equal to income.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been charged against a fixed asset since it was acquired, reflecting its loss of value over time.

Equipment

Equipment refers to the tangible assets or tools used in the operation or production process of businesses, which can range from office supplies to heavy machinery.

Fair Market Value

The price at which an asset would trade in an open and competitive market between a willing buyer and a willing seller, both having reasonable knowledge of the pertinent facts.

Original Investments

Original investments refer to the initial amount of money put into a business or project by its owners or investors.