Which One of the Following Statements Is False

question 58

Multiple Choice

Which one of the following statements is false?

• A)If the indifference curve is steep, the marginal rate of substitution is high.
• B)A low marginal rate of substitution implies a flat indifference curve.
• C)A flat indifference curve implies a consumer must receive a large amount of good X to compensate for a small decrease in good Y.
• D)A high marginal rate of substitution implies a consumer must receive a large amount of good X to compensate for a small decrease in good Y.
• E)A high marginal rate of substitution implies a consumer must receive a small amount of good X to compensate for a large decrease in good Y.

---

Definitions:

Total Cost

The sum of fixed and variable costs incurred by a business in producing a certain level of output.

Short-Run Average Total Cost

Short-run average total cost is the total cost of production (fixed and variable costs) divided by the total output produced, calculated when at least one factor of production is fixed.

Economies

The large set of interrelated production and consumption activities that aid in determining how scarce resources are allocated.

Diseconomies

Circumstances where increasing the scale of production leads to higher per-unit costs, often due to inefficiencies gained at larger scales.