If the Marginal Rate of Substitution Between Two Goods Is

question 20

Multiple Choice

If the marginal rate of substitution between two goods is not equal for Jack and Jill it means that:

• A)both could be made better off with a different distribution of goods between them.
• B)the efficient output mix is not being produced.
• C)inputs are being allocated inefficiently.
• D)the quantity supplied does not equal the quantity demanded.

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Definitions:

Preoperational

Pertains to Piaget’s stage of cognitive development (typically ages 2-7) in which children start to use language to explore and understand their environments, but do not yet use logical mental operations.

Sensorimotor

Referring to the developmental stage in Piaget's theory of cognitive development, where infants learn through interacting with the world using their senses and motor abilities.

Egocentrism

A cognitive bias where individuals overemphasize their own point of view at the expense of others' perspectives.

Animism

The belief that objects, places, and creatures all possess a distinct spiritual essence.