The Marginal Rate of Substitution Is

question 394

Multiple Choice

The marginal rate of substitution is

• A) equal to unit changes in the quantities of both goods so that utility rises.
• B) the slope of the budget line at all points.
• C) the change in the quantity of one good that just offsets a unit change in another good, keeping utility constant.
• D) found by adding additional units.

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Definitions:

Liability Accounts

Accounts on a balance sheet representing what a company owes to others, including loans, mortgages, and accounts payable.

Debits

Entries on the left-hand side of an accounting ledger, indicating increases in assets or expenses or decreases in liabilities or equity.

Transactions

Economic activities or events that affect the financial position of a company and can be quantified in monetary terms.

Journal Entries

Written records of all the financial transactions of a business, which are then used to prepare financial statements.