The Marginal Rate of Substitution Is the

question 207

Multiple Choice

The marginal rate of substitution is the

• A) rate at which the consumer will give up one good for an additional unit of the other good, such that total satisfaction is constant.
• B) rate at which the consumer can trade one good for the other in the marketplace.
• C) change in the quantity of one good that changes the utility received by one unit.
• D) same thing as the marginal utility of a good.

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Definitions:

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable and adjust the carrying value of the accounts.

Receivables

Receivables are amounts owed to a company by its customers or other parties for goods or services delivered but not yet paid for.

Uncollectible Accounts

Amounts owed to a company that it does not expect to collect due to customers being unable or unwilling to pay.

Allowance for Doubtful Accounts

An accounting provision made for receivables which may not be collectible.