When a Consumer's Marginal Rate of Substitution Between X and Y

question 46

Multiple Choice

When a consumer's marginal rate of substitution between X and Y is equal to the ratio of prices for X and Y,and when the consumer is spending all available income,then

• A)the budget line is tangent to an indifference curve.
• B)the consumer is not maximizing his utility.
• C)a higher indifference curve can be reached given the existing budget line.
• D)the budget line is tangent to the indifference curve at all quantities of X and Y.
• E)all budget lines are tangent to all indifference curves.

---

Definitions:

Established Business Practices

Conventional methods and procedures that are widely accepted and utilized within a particular industry or by a specific company over time.

Performance Levels

Measures of an individual, group, or organization's output compared to a predefined standard or expectation.

Direct Costs

Costs that can be directly attributed to the production of specific goods or services, such as labor and materials.

Factory Rent

Factory rent is the cost associated with leasing or renting a manufacturing facility, which is typically categorized as a fixed expense for the business.