When the Marginal Rates of Substitution for Two Consumers Differ

question 61

Multiple Choice

When the marginal rates of substitution for two consumers differ:

• A)the consumers' indifference curves are tangent.
• B)consumers will exchange goods and can end up anywhere inside the area bounded by their indifference curves.
• C)consumers will exchange goods and will end up on the contract curve inside the area bounded by their indifference curves.
• D)consumers will exchange goods and will end up on the contract curve,but not necessarily inside the area bounded by their indifference curves.

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