What do we call the magnitude of the slope of an indifference curve?
What will be an ideal response?
The magnitude of the slope of an indifference curve is called the marginal rate of substitution (MRS). The MRS measures the rate at which the consumer gives up one good to get more of another good, while remaining on the same indifference curve (keeping the consumer indifferent about the changes). The bowed-in shape of the indifference curve is due to the assumption of diminishing MRS.
You might also like to view...
In the real business cycle model, the short-run aggregate supply curve is always the same as ________
A) long-run aggregate supply B) the long-run aggregate demand schedule C) the velocity of money D) the real rate of interest
Suppose that the percentage change in supply is 20%, the price elasticity of supply is 2, and the percentage change in the equilibrium price is 4%. What is the price elasticity of demand?
A. 0 B. 1 C. 2 D. 3
If Inventory investment is higher than firms planned
A. actual investment must be negative. B. actual and planned investment are equal. C. actual investment is greater than planned investment. D. actual investment is less than planned investment.
If a firm's profit is $0, then it must be true that
A. TR equals TVC. B. TR equals TFC. C. TFC is zero. D. TR equals TC.