Which of the following statements about the marginal rate of substitution is NOT correct?
A) It measures the number of units of the good on the horizontal axis that a consumer must be compensated with to give up a unit of the good on the vertical axis, while remaining on the same indifference curve.
B) It is measured by the slope of the indifference curve.
C) It decreases in value when moving downward along a typical-shaped indifference curve.
D) It is constant for goods that are perfect substitutes.
A
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The value of marginal product of the third worker is ________. A) $110 B) $30 C) $360 D) $90
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What will be an ideal response?
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a. true b. false
Based on the given figure, the economy is initially at point A on the monetary policy reaction function (RF1) and the aggregate demand curve (AD1). The actual rate of inflation is ?' and the Federal Reserve's target inflation rate is ?*1. If the Federal Reserve raises its target inflation rate to ?*3, then the Federal Reserve's monetary policy reaction function will ________ and the aggregate demand curve will ________.
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