Along an Indifference Curve,if the Marginal Rate of Substitution Is

question 227

Multiple Choice

Along an indifference curve,if the marginal rate of substitution is 3,then the consumer is willing to

• A) give up 1 unit of the good measured along the y-axis for 3 units of the good measured along the x-axis.
• B) give up 3 units of the good measured along the y-axis for 1 unit of the good measured along the x-axis.
• C) pay $3 for one unit of the good measured along the y-axis.
• D) pay $3 for one unit of the good measured along the x-axis.
• E) give up 3 units of the good measured along the y-axis for 1 unit of income, that is, $1 of income.

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Definitions:

Efficient Use

The utilization of resources in a manner that maximizes the production of goods and services.

Resources

Assets or inputs available for use in the production process, including natural, human, and capital resources.

Opportunities

Refer to situations where individuals or organizations can exploit conditions to achieve goals or positive outcomes.

Efficient

The most efficient employment of resources to attain the intended result while minimizing waste or exertion.