If a Consumer Is at a Corner Solution,this Means That

question 42

Multiple Choice

If a consumer is at a corner solution,this means that:

• A)she is not spending all of his or her income.
• B)MRS is equal to the ratio of the prices of two goods.
• C)she would prefer to buy infinite amounts of one good.
• D)consumption of the first unit of one good is not worth its cost.

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Definitions:

Long-Run Average Cost

The average cost per unit of output when all inputs, including physical capital, are variable in the long term.

Upward-Sloping

A graph line that increases in height as it moves from left to right, characteristic of certain supply curves.

Economies of Scale

Cost advantages achieved by increasing production levels, resulting in lower per-unit costs due to spreading fixed costs over more units.

Long-Run Average Total Cost

A concept in economics that represents the per-unit cost of production in the long term, where all inputs are considered variable.