Figure 21-19 -Refer to Figure 21-19. Assume That the Consumer Depicted in Consumer

question 465

Multiple Choice

Figure 21-19
-Refer to Figure 21-19. Assume that the consumer depicted in the figure has an income of $50. The price of Skittles is $5 and the price of M&M's is $5. This consumer will choose a consumption bundle where the marginal rate of substitution is

• A)10.
• B)5.
• C)1.
• D)1/5.

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Definitions:

Market Wage Rate

The prevailing rate of pay for specific jobs in the labor market, typically influenced by supply and demand.

Wage Rate

The amount of remuneration offered to labor for their service per unit time.

Bushel of Corn

A standard measure, equal to 56 pounds in the U.S., used for volumes of dry commodities such as corn.

Profits

The financial gains obtained when the revenues from a business activity exceed the expenses, costs, and taxes needed to sustain the activity.