If the Slope of the Budget Line Is Steeper Than

question 156

Multiple Choice

If the slope of the budget line is steeper than the slope of the indifference curve,and X is on the horizontal axis:

• A) the consumer is willing to give up more of good X to get an additional unit of good Y than is necessary under the current market prices.
• B) MRS > P_X /P_Y.
• C) MRS = −P_X /P_Y.
• D) the consumer is willing to give up more of good Y to get an additional unit of good X than is necessary under the current market prices.

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