If the Slope of the Budget Line Is Steeper Than

question 156

Multiple Choice

If the slope of the budget line is steeper than the slope of the indifference curve,and X is on the horizontal axis:

• A) the consumer is willing to give up more of good X to get an additional unit of good Y than is necessary under the current market prices.
• B) MRS > P_X /P_Y.
• C) MRS = −P_X /P_Y.
• D) the consumer is willing to give up more of good Y to get an additional unit of good X than is necessary under the current market prices.

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Definitions:

Current Asset

Assets likely to be converted into cash, sold, or consumed within a year or normal operating cycle, such as cash, inventory, and accounts receivable.

Converted To Cash

The process of liquidating assets or investments to obtain cash, often used to meet short-term financial obligations.

Investments

Assets acquired for the purpose of generating income or profit, including stocks, bonds, real estate, or other vehicles.

Total Dollar Amount

The complete or aggregate sum of money expressed in dollars, typically referring to a specific financial transaction or set of transactions.