The Slope of an Indifference Curve

question 228

Multiple Choice

The slope of an indifference curve

• A)is calculated by dividing the price of good on the vertical axis by price of the good on the horizontal axis.
• B)measures total utility.
• C)measures the marginal rate of substitution between the two goods in question.
• D)is calculated by dividing the quantity of the good on the vertical axis by the quantity of the good on the horizontal axis.

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Definitions:

Consumption

The use of goods and services by households; an economic activity that represents spending by consumers.

Average Propensity

The ratio of total consumption to total income, indicating the average tendency of consumers to spend their income.

Disposable Income

Net pay after taxes and other deductions, available for spending, saving, or investment.

Consumption

The utilization of products and services by families.