-Consider Figure 5

question 88

Multiple Choice

-Consider Figure 5.3,which represents two countries,1 and 2.Country __________ has a higher saving rate and will have a __________ steady state than the other country.

• A)2;lower
• B)1;higher
• C)2;higher
• D)1;lower
• E)Not enough information is given.

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Definitions:

Corner Solution

In optimization problems, a situation where the optimal choice for a variable is at the limit or bound of its possible values, rather than in the interior of the choice set.

MRS

The speed at which a consumer is prepared to exchange one product for another while keeping the same degree of happiness or utility.

Travel

The act of moving from one place to another, which can be for various purposes such as leisure, business, or exploration.

Marginal Cost

Marginal cost is the cost increase for producing one more unit of a good or service, adding to the total cost.