When the Marginal Rates of Substitution Differs Across Any Two

question 22

Multiple Choice

When the marginal rates of substitution differs across any two consumers,then:

• A)mutually beneficial trade is possible between them.
• B)the only way to make one consumer better off is to make the other worse off.
• C)it is impossible to find a point that makes both worse off.
• D)a mutual exchange between them will leave them worse off.

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Definitions:

Franchise

A business arrangement between an owner of a trade name or trademark and a person who sells goods or services under the trade name or trademark.

Trademark

A symbol, word, or phrase legally registered or established by use as representing a company or product.

Chain-style Business

A business model where multiple outlets are owned, franchised, or managed under a single brand or corporation.

Franchisor's Standards

Regulations and expectations set by the franchisor that the franchisee is required to follow to maintain the consistency and quality of the brand.