The Marginal Rate of Substitution Is

question 33

Multiple Choice

The marginal rate of substitution is

• A) the rate at which the consumer will give up one good to get an additional unit of another good while remaining on the same indifference curve.
• B) the rate at which utility increases as the consumer increases purchases of a good, holding purchases of the other good constant.
• C) the rate at which a consumer will exchange a good for income holding prices constant.
• D) None of the above answers is correct.

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Definitions:

Current Asset

An asset that is expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business.