The Rate at Which a Consumer Is Willing to Substitute

question 93

Multiple Choice

The rate at which a consumer is willing to substitute one good for another,while still maintaining a given level of satisfaction,is called the

• A) market rate of substitution.
• B) average rate of substitution.
• C) marginal rate of substitution.
• D) budget constraint.

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Definitions:

Materials Quantity Variance

The difference between the budgeted and actual quantities of materials used in production, affecting cost management.

Standard Cost

A predetermined cost of manufacturing, calculated based on the expected costs of material, labor, and overhead for a unit of product.

Materials Price Variance

The difference between the actual cost of materials used in production and the standard cost, reflecting changes in material prices.

Materials Quantity Variance

The difference between the expected amount of materials needed for production and the actual amount used.