The Marginal Rate of Substitution Is

question 24

Multiple Choice

The marginal rate of substitution is

• A)the slope of the utility curve.
• B)the slope of the contract curve.
• C)the slope of the utility possibilities curve.
• D)none of the above.

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Definitions:

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the company's profits and a right to vote on shareholder matters.

Treasury Stock

Treasury stock consists of shares that were issued and later reacquired by the company. These shares do not pay dividends and do not have voting rights.

Par Common Stock

The nominal or face value of a share of common stock as stated in the corporate charter, which has no direct relation to the market value.

Fair Market Price

This term refers to the price at which an asset would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.