Moving Along an Indifference Curve the

question 253

Multiple Choice

Moving along an indifference curve the

• A) marginal rate of substitution is constant.
• B) consumer does not prefer one consumption point to another.
• C) marginal rate of substitution is equal to 0.
• D) consumer prefers some of the consumption points to others.
• E) marginal rate of substitution for a good increases as more of the good is consumed.

---

Definitions:

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than others.

Opportunity Cost

The value of the best alternative foregone as a result of making a decision, a fundamental concept in economics that emphasizes the cost of trade-offs.

Production Possibility Frontier

A diagram that outlines every possible maximal production scenario for various items, considering a fixed amount of resources.

Trade

The exchange of goods or services between parties.