An Indifference Diagram Has Movies on the Vertical Axis and Sodas

question 269

Multiple Choice

An indifference diagram has movies on the vertical axis and sodas on the horizontal axis. As the consumption of sodas increases, the marginal rate of substitution ________ and the indifference curve becomes ________.

• A) falls; flatter
• B) falls; steeper
• C) rises; flatter
• D) rises; steeper

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Definitions:

Accumulated Depreciation

The sum of all depreciation expenses allocated for a physical asset from the time it was first utilized.

Depreciation Expense

The systematic write-off of the cost of a tangible asset over its useful life.

Intangibles

Assets that lack physical substance but are nonetheless valuable to a company, such as patents, trademarks, goodwill, and copyrights.

Constructing

The process of building or assembling infrastructure, buildings, or other substantial physical structures.