A Consumer Maximizes Satisfaction at the Point Where His Subjective

question 32

Multiple Choice

A consumer maximizes satisfaction at the point where his subjective valuation of good X measured as the amount of good Y he or she is willing to give up to obtain an additional unit of X equals

• A) the slope of the indifference curve through that point.
• B) one over the slope of the indifference curve through that point.
• C) Px / Py.
• D) Py / Px.
• E) Y / Px.

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Definitions:

MRP

Marginal Revenue Product, a term in economics that represents the additional revenue generated by employing one more unit of a factor, such as labor or capital.

Investment

The allocation of resources, such as capital or time, in order to generate future profit or income.

Usury Laws

Statutes that set maximum interest rates that can be charged on loans, intended to protect consumers from excessively high rates.

Interest Rates

The cost of borrowing money or the return on investment, typically expressed as a percentage of the principal.