Suppose That MRS_{x, Y} = 10

question 44

Multiple Choice

Suppose that MRS_{x, y} = 10.

• A) The consumer is willing to substitute 10 units of x for 1 unit of y to leave utility unchanged.
• B) The consumer is willing to substitute 10 units of y for 1 unit of x to leave utility unchanged.
• C) Regardless of prices, the consumer will consume only y .
• D) Regardless of prices, the consumer will consume only x .

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Definitions:

Price Ceiling

A legal maximum price at which a good can be sold, often set by government to control prices.

Housing Shortage

A situation where the supply of available houses is not sufficient to meet the demand for them in a particular area.

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded, achieving market equilibrium.

Excise Tax

A tax levied on specific goods, services, or transactions, often included directly in the price of the product like gasoline, alcohol, and tobacco.