An optimizing consumer will select the consumption bundle in which the marginal rate of substitution
a. is equal to the price of the least-expensive good.
b. exceeds the marginal utility of each good by the greatest amount.
c. is less than the slope of the budget constraint.
d. None of the above is correct.
d
You might also like to view...
Explain why Relative PPP is useful when comparing countries that base their price levels on different product baskets
What will be an ideal response?
Policies which promote education are central to all of the following except:
A. economic development. B. economic growth. C. increasing the capabilities of a society. D. federal reserve bank’s interest rate policy.
Supporters of globalization argue that increased globalization will lead to:
a. increased living standards. b. decreased budget deficits. c. decreased trade deficits. d. currency appreciation. e. monetary stability.
Consumer will always consume more of a good if their income increases
a. True b. False Indicate whether the statement is true or false