Which of the Following Correctly Expresses the Relationship Between the Marginal

question 31

Multiple Choice

Which of the following correctly expresses the relationship between the marginal utilities of two goods and marginal rate of substitution between the goods?

• A) MRS_XY = (MU_Y/MU_X)
• B) MRS_XY = (MU_X/MU_Y)
• C) MRS_XY = (U/∆X)
• D) MRS_XY = (U/∆Y)

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Definitions:

Raw Materials

The basic materials and substances used in the initial stages of production to manufacture goods.

Standard Costs

Predicted costs associated with manufacturing or providing a service, used for budgetary control and performance analysis.

Cash Account

An account that tracks the flow of cash transactions, including all receipts and payments of cash.

Standard Cost Variances

Differences between the planned (standard) costs and the actual costs incurred.