The Marginal Rate of Substitution Is

question 394

Multiple Choice

The marginal rate of substitution is

• A) equal to unit changes in the quantities of both goods so that utility rises.
• B) the slope of the budget line at all points.
• C) the change in the quantity of one good that just offsets a unit change in another good, keeping utility constant.
• D) found by adding additional units.

---

Definitions:

Geometric Average Return

Is the average rate of return of a set of values calculated using the products of the terms.

Arithmetic Return

The simple average of periodic returns of an investment over a specified time frame.

Dollar-Weighted Return

A method of calculating an investment's return that accounts for the timing and magnitude of cash flows into and out of the investment.

Dollar-Weighted Return

A method of calculating an investment's return that considers the timing and amount of capital inflows and outflows.