Using indifference curve analysis, an optimum is characterized by
A) the marginal rate of substitution of one good divided by its price equal to the marginal rate of substitution of the other good divided by its price.
B) the marginal rate of substitution being equal to one.
C) the marginal rate of substitution being equal to zero.
D) the marginal rate of substitution being equal to the ratio of the prices of the two goods.
Answer: D
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