Along an Indifference Curve

question 64

Multiple Choice

Along an indifference curve

• A)the MRS is constant.
• B)the ratio of the marginal utilities is constant.
• C)the price ratio is constant.
• D)all of the above
• E)none of the above

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Definitions:

Diminishing Returns

Diminishing returns is an economic principle stating that as more investments or resources are added to a production process, the incremental gain in output will eventually decrease if all other factors remain constant.

Disguised Unemployment

Situations where more people are employed in a task or job than is necessary for its completion, leading to inefficiency.

Capital Goods

Long-term assets such as buildings, machinery, and equipment purchased by businesses to produce goods and services.

Terms of Trade

The ratio of an index of a country's export prices to an index of its import prices, used to measure the relative trading advantage or disadvantage.